The use of artificial intelligence (AI) in wealth management could be a “game changer” in improving user experience in both the high net-worth individual (HNWI) and mass affluent markets, according to a new Forbes Insights and Temenos report.
The report found that 93 per cent of wealth managers said AI would play a role in the future of their practice, and 84 per cent of HNWIs were accepting or highly accepting of this technology in their investing experience.
Fifty-four per cent of respondents said AI would be essential for them to succeed and to offer personalised guidance, and 67 per cent of HNWI believed their wealth manager should adopt some level of AI.
Forty-six per cent of wealth managers believed advanced analytics would help them acquire and retain mass affluent clients, with respondents confirming that digitalisation, specifically the use of AI, had positively impacted portfolio returns, and improved client communication and overall experience.
HNWIs agreed, adding that an AI-enabled environment provided further transparency for investors, removing emotion.
Ed Gogel, a HNWI quoted in the report said: “AI technologies are agnostic, which is really what you want in an investor.”
Product director of wealth at Temenos, Pierre Bouquieaux, said now that AI technologies were weaving their way into the traditional world of wealth management, a balancing act had emerged that would define the future of the industry.
“… The blending of man and machine in advisers that produces better service and results for increasingly tech-savvy HNWIs and mass affluent clients,” he explained.
Bouquieaux said while the emergence of robo-advisers, which automate asset allocation and portfolio management, was once considered “radical,” today almost 90 per cent of wealth managers viewed them in a positive light.
Similarly, while chatbots were scarcely a factor in wealth management two years ago, now 70 per cent of wealth managers see them as beneficial, as do 57 per cent of HNWIs.
Managing director at Wells Fargo Advisors, Scott Welz, said chatbots could offer correct answers or correct information to address a client’s concern or need, and could even predict other areas related to the issue.
Morgan Stanley was not quite as convinced, noting that “as soon as you move to more esoteric questions, the wheel comes off the boot”.
The firm is, however, doing work with bots to ensure their service and support was more effective, recognising it as a powerful way to help financial advisers move up the value chain.
