Think about the most recent purchase you made. Was it an impulse buy, perhaps a candy bar at the checkout counter or that cat toy you kept seeing in online ads? Maybe it was a new dishwasher, which you’d carefully researched and saved toward. What does this purchase say about your appetite for investing?
Tantalizing as it is, this data’s value today is largely anecdotal when it comes to predicting a person’s investment behavior. But in the future, when the next generation of artificial intelligence-powered digital assistants can take our spending habits and array them against a lifetime of other personal data points, plus those of your friends, this spending track record could hold the key to assembling an investment portfolio. Think “know your client” on steroids. The more data about you to analyze, the more personalized a recommendation can be continuously tailored to your age, education level, net worth and so on.
This is just one example of how wealth management will look different—more automated and connected—in the future. No longer tagged with the “robo” or “digital advice” monikers, wealth management will be a seamless and ubiquitous component of people’s lives online.
Several emerging trends will drive this ubiquity. Digital personal assistants such as Siri and Alexa, still in their infancy now, will be smarter and more integrated into all aspects of daily life. Future generations will have a cradle-to-grave relationship with their assistants, which will be tasked with managing everything from a person’s education and well-being to employment and money.
Always “on,” digital assistants will never be more than a tap, glance or nerve twitch away. Even when they’re not talking with us, our digital assistants will be talking with each other and with the businesses we use: scheduling social appointments, paying bills, etc. Seeing a clearer picture of your financial health will be instant. And through analyzing the myriad data they amass on us and our families, our assistants will know the right timing and approach to use when alerting us to financial pitfalls or opportunities alike.
A convergence of big data and cashless technologies, such as blockchain and mobile wallet, could also open new areas for personal revenue and wealth management. As guided by our digital assistants, we might each become a mini venture capitalist investment shop: pursuing microinvestment opportunities created by lending money to friends across town, or funding individual entrepreneurs in emerging economies around the world. Each opportunity will be sourced by our digital assistants.
In an interconnected and cashless society, the de facto expectation for wealth management advice will be online. As we’ve already seen with the rise of automated advice platforms, or so-called “robo advisors,” the cost of this online experience will continue falling, opening the world of wealth management to more people. Uptake rates will accelerate and drive a feedback loop of further adoption and financial literacy. The trend will also create new revenue possibilities for leveraging data—similar to how the rapid adoption of wearable tech continues to fuel increased demand for digital health management.
If this talk of ubiquitous, online wealth management leaves you wondering about the fate of human advisors, have no fear. Better financial wellness benefits everyone.
The role of human financial advisors will become more specialized. As advisors gain more information about clients, they can shed the busy work of account management—much like the development of automated design tools has enabled architects to create better and more interesting buildings.
Margaret J. Hartigan is the founder and CEO of Marstone, Inc., an enterprise-ready online wealth management platform.