Advisors are using artificial intelligence to expand access to wealth management insights.
Traditional financial plans often required multiple meetings between advisors and clients with cadres who stayed out of meetings to stagnate, but the incorporation of AI has made that conversation continuous, said Sam Palmer, managing director at JPMorgan Wealth Management, during a meeting. panel discussion at Financial Planning’s INVEST conference in June.
“What started with clients who need to interact with an advisor, even to be able to trade stocks transitioning through access to digital tools and automation, is [now] more consumer-owned tools for financial planning and financial health,” said Palmer. “We are now able to continuously monitor as individuals [and] as a consumer of my cash flow.”
This eliminates the need for simple one-off conversations with an advisor.
Giving clients access to wealth management tools and other services through AI is a leading trend among advisors. Recent examples of this include: Fidelitythat allows consumers to build custom indices and invest in select stocks at a monthly fee amid the rising popularity of direct indexing† Other companies like Regions Financial and Ally Financial are combining human and robo-advisors for clients who prefer different levels of interaction.
But despite the benefits for wealth management professionals AI-powered automation, many companies still use a hybrid model, so human interaction is still an important element in the consulting process.
“Portfolio management is something that is automatable and something that people are willing to involve machines more in,” said Iraklis Kourtidis, co-founder and chief executive of the software development company Rowboat Advisors in Menlo Park, California.
This frees up people to work on high-level tasks, such as determining the right portfolio based on the consumer’s risk profile, Kourtidis said.
Using the additional resources that would otherwise have been devoted to tasks that are now performed autonomously, consultants can now delve deeper into the complex issues facing clients.
“What advisors need to do and recognize, especially the next generation of advisors, is that they need to solve bigger client problems by getting right into the midst of everything that comes into play. [their] lives and solving those problems,” said Andrew Altfest, president of New York-based registered investment advisory firm Altfest Personal Wealth Management.
By freeing up resources through the use of AI, wealth management experts can expand access to valuable financial advice for those previously considered undercapitalized, Altfest said.
“The only way you can ever do that on a large scale is by using technology, especially AI,” Altfest said. “AI now allows us to find out what’s going on in someone’s life and get to those advice opportunities. … The advice scale is the most exciting for me and it allows us to kill the sacred cows of” alone are for the rich.