Artificial intelligence (AI) seems to be everywhere these days, including (if they are lucky) at the fingertips of financial advisors. AI, when designed specifically for wealth management, can help advisors be more efficient, focus less on administrative tasks and more on actual client engagement. And AI continues to evolve and mature. In the next few years, advisors can expect AI to deliver even more highly intuitive, time-saving features that will free them to concentrate on what matters most in serving clients.
We recently caught up with Andrew Cant, Vice President of Financial Services Solutions for NexJ, to explore what’s next for AI in wealth management and what advisors can expect and look forward to:
Andrew, there have been significant advancements in how wealth management firms are utilizing artificial intelligence to better equip advisors to engage with clients. What sort of new AI-driven tools can advisors expect in the next few years?
Andrew: What we often hear from clients is that they don’t care about the technology itself. Rather, they want to know, “Tell me what it does.” Operationalizing technology into real, problem-solving tools is what advisors should expect in coming years. Tools that can automate more and more standard tasks for the advisor. For example, meeting preparation automation for the advisor and his or her assistant will become more prevalent in the next few years. Reducing the admin tasks of an advisor and improving productivity will be a huge benefit.
Tools for better, more personalized engagement will also become more commonplace, such as, dynamically segmenting books of business and recommendations for engagement based on that segmentation.
How could these advancements be a game changer for advisors and their firms? What are the tasks or obstacles that advisors are saddled with today that AI can help solve for?
Andrew: These new solutions can ultimately enable an advisor to service more clients while improving the quality of engagement, which in turn will reduce churn and support maximizing the value of their existing relationships. For advisors building their books, it will enable them to grow faster. The one thing we hear in every conversation we have with clients is that they are looking for ways to make their advisors more efficient and take away manual admin tasks. Having technology that ensures advisors are aware of tasks that will become due, prompting the advisor that is the case, and then providing the detail to complete the task will be huge. A good example is for a client about to experience a life event – first prediction/detection that the event is about to happen, telling the advisor, and providing the advisor with the best practices for engagement relevant to the type of life event, and finally automating the related tasks that have been agreed upon with the client.
For firms that don’t utilize AI-driven solutions, what risks do they face? Will their advisors find it more difficult to engage with clients how and when they want to be engaged with?
Andrew: The biggest risks are around remaining competitive with their peers who are using these technologies. AI solutions will reduce cost to serve, and personalized experiences and service levels will grow. Not leveraging the technology to support an advisor team will make it even harder to remain competitive in this market. The expectations of clients are growing all the time, not only in the digital tools available to them, but also the level of personalized engagement they expect from their advisor.
Can you provide insight into the mechanics of how AI works in helping advisors engage with clients? AI is fascinating, yet still mysterious to many of us. How does it actually work?
Andrew: Simply put, AI works with large amounts of data often from different sources and uses algorithms to deduce intelligent conclusions or insights. The goal is to be able to mimic what a human would do when faced with the same data. To use a simple example, we use natural language processing (a branch of AI) to detect discussions about life events in emails. The difficulty in that can be significant. If a client says in an email, “I’m picking my baby up tomorrow,” that could easily be assumed to be a human baby, but it could be a car or a yacht or something similar. AI is trained to understand context and possession within the whole email. We train the AI much as you would a child to recognize important terms, context and possession, and then correct it when it is wrong so that it eventually can become very accurate in its results. And when it does, it can then read thousands of emails very quickly to identify clients going through a significant life event.
According to a recent Forrester Research report, there is an increasing need for CRM tools that are built specifically for particular industries, such as financial services. Why is that so important?
Andrew: Technology should make the lives of its users easier, rather than be a burden. That goes without saying, but it’s not always the case. To help advisors do their jobs, the data and concepts that are presented must be relevant and meaningful to what they do every day. In a very specific industry, such as financial services, it’s critical to be able to easily work with a CRM that already understands the business model – for example what KYC is and how the network of a client is important to managing wealth, whether it’s their family or their accountant. Also understanding the concepts - and ideally integrating them - to all the other systems advisors use, such as financial planning or portfolio management. A non-specific CRM is not going to deliver that experience for the user.
Looking out even further, how do you see AI changing the way wealth management firms and advisors operate over the next 5-10 years? What gets you excited?
Andrew: I’m excited about how all of these capabilities within AI will eventually come together to provide real-time support for an advisor. I see a world where I am having a video call with my client and my computer is listening and automatically providing me support and answers to questions the client is asking, so I don’t need to be going to different systems to search for answers. If the client asks if a trade has settled, the computer will send an alert. If the client says he or she is thinking of retiring early, it can present the impact on a portfolio and options for transitioning that portfolio. Then once decisions are made, the system can execute on agreed-upon actions. That level of augmentation and support will deliver a superior, personalized and efficient client experience. It will also automate many activities for the advisor, delivering significant productivity gains.
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