Bernie Madoff's journey to jail has had a lot of fallout, including effects on wealth managers who now have a new dynamic on their hands: scared clients with shrinking assets who've also lost faith in the wealth management profession.

"These scandals like Madoff and (R. Allen) Stanford have been a catalyst for people wanting to know what's going to happen to their money, and who want to take a more active role," says David Kaufman, CEO of Voyant, an Austin, TX-based tech firm that sells online user-driven financial planning solutions. "The downturn has damaged the (advisors') credibility."

Perhaps more than the middle class, the high net worth and mass affluent segments have lost major portions of their wealth. This has translated to clients are seeking a more collaborative and transparent relationship with wealth managers, both at financial institutions and independent firms. Web-enabled technology purchased on a subscription basis - including portals offered by vendors like Voyant, SunGard and others - will play a role, given their financial planning-friendly mix of online calculators, hypothetical scenarios, real-time transaction reporting and up-to-date balance inquiry capabilities.

For example, Voyant's solution - which can be licensed and integrated into a bank's overall Web offering or deployed as a service - provides "what if" simulations allowing consumers to test their financial health in various market and macroeconomic conditions. Users can also test myriad combinations, such as changing market performance while simultaneously increasing the inflation rate over a period of several years. Market and economic conditions can also be varied for specific investments or expenses, such as giving individual investment accounts unique portfolios or inflation rates - a tool that can be applied to education finance, where costs have traditionally outpaced the normal rate of inflation.

Blaine Maxfield, COO of wealth management, at SunGard, says the underlying "on-demand" technology has also become more flexible, allowing wealth managers at banks and independent firms of all sizes to make quick, broad-based flexible customer-facing deployments.

"So many clients are scared to death about what's going on," says Clark Stone, financial planning manager for Hilliard Lyons, a private wealth management firm based in Louisville, KY, which uses a SunGard online wealth management platform to aid in investment and allocation strategies and match possible outcomes to client goals. "And the tech does help give clients comfort. I wish that wasn't the case, because it's not the technology tool that makes the final decision."

The tech firms that stand to benefit financially from this shift obviously aren't selling the Internet as a way to get rid of financial advisors, but the message that wealth management can no longer thrive just on personal relationships alone is unmistakable.

"Wealth management is still an advisor driven business, I don't believe there's a move away from advice," Kaufman says. "But there is a push toward collaboration between clients and advisors, rather than the high net worth simply giving money to advisors to manage."

Some wealth managers also say their clients are more likely to buy into a financial strategy once they've seen the hard numbers for themselves on a Website, even if those numbers are hypothetical and based on modeling. "We've found this tool is helpful in closing the sale for perspective customers," says Doug Sherratt, president of Smithfield Trust, a Pittsburgh-based high net worth wealth manager, which also uses the solution as part of ongoing customer service and for reviews with existing customers.

Sean Cuniff, research director in the brokerage and wealth management practice at TowerGroup, says many firms are adopting an approach in which a customer sends the information to the financial institution via a secure email, it's then used as part of the advisory service. Fidelity Investments, for example, transmits consumer-initiated research on personal financial planning matters back to wealth managers, who then use the information as part of their personal client sessions.

And Citigroup in the past year debuted myFi, a self-directed financial planning tool powered by tech vendor ASI that includes a mix of myFI.com - a site that helps users organize financial data and money management relationships in a single place as well as opportunities to form peer networks - and access to financial coaching, advisors and specialists.

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