What is WealthTech?

WealthTech automates the work of wealth management, from the client questionnaire to the rebalancing of a portfolio. Dziawgo (2021) describes wealth management as "conducting tailor-made strategy in managing assets" for a client within an agreed financial plan. Software takes over parts of that work: it collects client data, proposes an allocation, executes orders and reports to the client.

The same paper lists six WealthTech services: robo-advisory, robo-retirement for savings plans, digital brokerage for access to the stock market, micro investment with small amounts, algorithmic trading and B2B software for firms. BaFin describes the most common form, the robo-advisor: a client enters goals and risk appetite, and an algorithm builds an investment strategy, often from ETFs.

A WealthTech company is a firm whose product is software or a digital service for investing or for managing wealth. There are two groups. The first serves investors directly; examples are robo-advisors and trading apps. The second sells software to banks, asset managers and independent advisers.

The first group needs a license as soon as it gives investment advice or manages portfolios. BaFin names the providers of robo-advice in Germany: banks, financial services institutions (often start-ups or fintechs) and financial investment intermediaries, which the chambers of commerce (IHK) supervise. WealthTech companies of the second group sell to banks and other licensed firms.

WealthTech is one part of fintech. Fintech covers all financial technology, while WealthTech covers the part for investing and wealth management. Dziawgo (2021) names the main fintech sectors as investment services, risk management, payment services, data privacy management and digital client servicing platforms. WealthTech belongs to the first of them.

The difference also shows in the law. A payment app falls under payment services law. A WealthTech product that recommends financial instruments falls under the MiFID II rules for investment advice and portfolio management, including the suitability test of Article 25(2): the firm has to ask about the client's knowledge and experience, financial situation and investment objectives.

AI is one technology inside WealthTech, and so far it has a small share in investment decisions. In an ESMA survey of summer 2025, 395 firms in EU securities markets reported 833 AI use cases. Most served support functions: 239 were drafting and summarizing. Robo-advising accounted for 2 use cases and portfolio optimization for 19 (ESMA, February 20, 2026).

In a statement of May 30, 2024, ESMA reminded firms that their decisions "remain the responsibility of management bodies, irrespective of whether those decisions are taken by people or AI-based tools". More on this topic: how AI is used in wealth management.

In Germany, the Deutsche Bundesbank in Frankfurt counted EUR 9,490 billion in financial assets of households at the end of March 2026, and households bought a net EUR 27 billion of investment fund shares in the first quarter (Bundesbank, July 16, 2026). Automated portfolio management needs a BaFin license under § 32(1) of the Banking Act (KWG) or § 15(1) of the Investment Firm Act (WpIG). Automated investment advice is a licensed service under § 1(1a) sentence 2 no. 1a KWG and § 2(2) sentence 1 no. 4 WpIG. BaFin states that a final assessment needs the contracts behind the business model. WealthTech in Germany is therefore regulated by service: the license depends on what the software does for the client.

In Austria, § 3(2) of the Securities Supervision Act 2018 (WAG 2018) requires a license from the FMA for investment advice and for portfolio management. Switzerland is outside the EU, so MiFID II does not apply there. Portfolio managers need a FINMA license and are then supervised by a supervisory organization, and Article 12 of the Financial Services Act (FinSA) requires a suitability check for portfolio management. This page gives no legal advice.