Wealth Management 2044
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Virtualized Scenarios and Automated Research

Machines will offload some advisor work while also enhancing the client experience. By Will Trout

Imagine a world defined not by physical and digital channels but where the real and the virtual are one. A place where artificial intelligence is not understood as artificial or even particularly intelligent, but as part of the fabric of the client advisor dialogue.

That world is almost here. By 2025, use cases for AI in wealth management will extend beyond security selection and compliance to managing advisor capacity in terms of workload and client engagement. Today, advisors are using AI-driven tools to manage and create client-facing marketing and education content. Tomorrow, the ubiquity of technology like the internet of things will herald nearly unforeseeable use cases.

From NLG to NLP and Beyond

Deployment of AI in wealth management is already a phenomenon. Natural language generation tools offered by firms like Narrative Science and Automated Insights are creating portfolio commentary and investment research for global firms, such as Vanguard and Credit Suisse. Wealth managers have also started to embrace chatbot and other natural language–processing solutions developed for the more transaction-focused banking and insurance businesses. IPsoft’s virtual communications agent, Amelia, can gauge client contentment by voice timbre and tone and shift the conversation to a human advisor as needed. How much longer before bots and other intelligent agents are helping to automate advisor meeting preparation?

The Future Is Virtual

Given ongoing digitization and the trend to investor self-service, virtual reality technology may present intriguing opportunities. The size and affluence of the baby boomer generation means that, by 2025, the general investor population will look a lot grayer than today. VR offers a potential salve to a population that will live longer and become increasingly isolated and infirm. Here access will be delivered not through headsets and goggles but through Internet-based alternate realities that allow users to experience possible scenarios in a visceral way online. Think Second Life, the early 2000s platform that is undergoing a rebirth or next generation alternatives like Sinespace. The changing shape of advice, in addition to demographics, foretells greater interest in such visualization. Over the past decade, the focus of digitization has shifted from portfolio manufacturing and maintenance to more holistic advice ranging from wellness to wealth transfer.

Democratization of Advice

As formerly complex services are digitized, access is diffused to all levels of wealth, spurring even more adoption. Vendors like Advizr have tapped into the wave by introducing cloud-based technology supporting delivery of “financial planning lite” tools to advisors. Because the need for portfolio management is not going away, planning tools are incorporating investment functionality within their advisor portals. Enabling a more dynamic relationship between the portfolio management and the planning processes is also an objective of investment-centric hybrid delivery models like Vanguard’s Personal Advisor Services automated advice platform.

Next Step Forward

By 2025, there will be as many flavors of advice delivery as ice cream. Enabling advisor choice and access to new tools is the proliferation of the application programming interface. And the shift to cloud computing and advances in processing power and analytics promise to accelerate the shifts taking place within the wealth management business too, specifically in terms of the way human and machine interact.


Will Trout is head of wealth and asset management at research and advisory firm Celent.

TAGS: Technology
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