Using Artificial Intelligence to Enhance Wealth Management

Artificial Intelligence is changing every aspect of financial services and wealth management. Traditional wealth management firms are adapting. Here’s how.

Communications will change

When an advisor calls a client, an AI-powered program will provide the advisor with the following types of insights:

  • Talking points based on the client’s portfolio and history
  • Relevant news stories to add context to the conversation
  • A reminder of needed portfolio reallocations
  • Analysis of the investor’s tone of voice to detect problems or concerns
  • Personal information, such as how many children the client has and whether they just started school

Chatbots are already able to answer the basic, day-to-day questions clients have about their portfolios, such as the specific sectors, asset classes or securities they’re exposed to. This will reduce advisors’ operational workload so they have more time to add and manage new client relationships. Every communication that is currently written once and mass delivered will instead be personalized on an investor-by-investor basis using AI. Emails, statements, news stories, reports, and event information will all be personalized, and will strengthen the FI-client relationships.

Operations will change

When a wealth management company currently onboards a new investor, the manual data entry effort is vast and tedious. This includes keying in the new client’s incoming assets, KYC data, and other required information. In the future, AI will automatically ingest each investor’s information, such as portfolio details, personal identification, real estate, art, and other holdings, income, tax records, and anything else that’s pertinent. It will then be processed into the firm’s system. No tedious data entry required. Just snap a photo and get started.

When new investment opportunities arise, such as IPOs, bond issues, derivatives, and real-estate, analysts won’t have to comb through hundreds of pages of prospectus documentation, which can take weeks. AI will instantly summarize the high-level information, raise red-flags it finds in the details, and prepare talking points for advisors. Also, ancillary tasks, such as booking meetings and calls with clients, finding new office space after a growth spurt, assessing team performance, and even recommending professional development courses, will be automated using AI tools.

Marketing and Sales will change

AI helps wealth management firms engage with their audience in ways that were unimaginable only a few years ago. New marketing and sales approaches are emerging. Everything from tuning and optimizing social media messages, writing blog headlines, finding good quality content to syndicate, creating better landing pages and advertising campaigns, are now possible. Data can be used to help firms target better, whether it’s finding “new-money” investors who are in transition from poor to rich, or finding “old-money” investors who are looking for a change. AI can even analyze peoples’ tweets to see if they’re unhappy with their current advisors.

Clever use of social media algorithms can figure out if a person is going through a big life change (such as retirement or selling a business) making them ripe for targeting. Sentiment analysis can enrich your marketing insights and reveal how a client feels about your brand. The same AI can then be scaled up to simultaneously analyze everyone in a targeted region to identify potential clients.

Machine learning will help close deals by providing answers to an advisor’s client relationship questions: Should a particular prospect be invited to dinner or a round of golf? Should the prospect be impressed with technical knowledge about the market, or should the focus be on relationship building such as learning about his or her family? AI will even instruct the advisors about what to do to maximize their chances of closing deals.

Everything will change

AI is going to touch every aspect of wealth management firms, from communicating with current clients, to running day-to-day operations, to determining how to attract new clients and grow their portfolios, and to AI trading and investment algorithms.