AI is changing wealth management. But maybe not fast enough

The vast majority (98 percent) of financial advisors say their companies have taken steps to implement AI strategies — including proof of concepts, deploying artificial intelligence within targeted business units, and scaling it across the organization — but many advisors also believe their companies’ AI tools and insights are too complex to use, according to a new survey by Accenture.

Accenture has been conducting and publishing research into the perception and use of AI in asset management for years. In December 2020, the The company published a survey of 100 wealth management executives and found that 84 percent of executives said AI will “fundamentally transform the wealth management industry over the next five years.” but 85 percent also said the impact of AI is “more hype than reality for today’s businesses.” Of those surveyed in 2020, 60 percent said they were already using artificial intelligence, and 28 percent were scaling or expanding its use.

Eighteen months later, 83 percent of advisors believe AI will have a direct, measurable and consistent impact on the client-advisor relationship by early 2024, and the same percentage believe AI will be able to deliver “a level of sophisticated advice within that same time frame.” and planning that will eventually leave [financial advisors] compete with an algorithm for customers.”

Independent RIAs made up 16 percent of the survey respondents, with the majority (43 percent) coming from advisors at brokerage houses. Scott Reddel, director of wealth management at Accenture and one of the principal investigators in this study, said he was surprised at the “extreme” positive response to AI from advisors compared to previous years. The reasons for this, he says, are twofold.

“Companies are making AI a priority, so advisors hear more about it and hear different things. Plus, the industry and consultants have gotten smarter and better at rationalizing expectations of what AI will do,” said Reddel.

Most asset managers using AI technology focus on “low hanging fruit” that helps advisors deliver a particular advice or product that helps advisors do their jobs better or more efficiently, Reddel says.

There are many examples of this type of technology being deployed, of prospecting tools that use machine learning and publicly available market data to help advisors hyper-personalize their reach until financial planning software that helps advisors analyze wealth and tax data† Bento Engine, a fintech company that mines CRM data and automatically alerts advisors when it finds potential consulting opportunities for their clients, recently raised $1.1 million in seed funding

Consultants want AI tools that make them more time efficient and improve the perception their clients have of them.

Of those surveyed, 87 percent of consultants want to use more AI tools on a daily basis, and over 80 percent believe AI-powered real-time notifications of clients’ life events would be one of the clearest and measurable benefits. Eight out of 10 consultants also prefer to use AI tools to automate time-consuming manual tasks and believe the biggest benefit of AI is translating client data into actionable insights.

Still, there are challenges in integrating AI into asset management systems.

“There are many different pilots with different use cases, so it becomes difficult for an advisor to figure out what is really useful or where they get the value. That creates a lot of churn in adoption,” says Reddel.

Doug Fritz, founder and CEO of F2 Strategy, a technology consultant to wealth management companies, says real AI technology is almost nonexistent in wealth management and that most of what advisors want and what companies call “AI” is just automation.

“Artificial intelligences are tools that can view trends and then suggest specific actions in the future,” Fritz said. “If Excel can do it, it probably isn’t artificial.”

Both Fritz and Reddel agree that asset management is lagging far behind other industries in implementing the technology.

An Accenture from 2021 worldwide survey of 1,176 companies in 16 industries on their use of AI technology and its maturity saw financial services come in last. (According to the study, AI maturity is the degree to which organizations outperform their peers in a combination of AI-related fundamental and differentiating capabilities.)

According to Accenture’s most recent survey, many consultants at companies investing in some form of AI technology or automation struggle with how their companies implement it. had hoped. More than 60 percent of consultants believe their company is undertaking too many AI pilots in its drive to adopt the technology. (Nearly half believe their company’s culture is the biggest barrier to adopting AI.)

Companies developing AI technology should focus on seeing a single use case or program to the end, ensuring that the company’s priorities align with where advisors find high value, and providing management support to ensure the success of the AI ​​program. guarantee, the report said.

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