Artificial intelligence (AI) is poised to transform the wealth management landscape, with an overwhelming majority of investors—90%—recognizing its potential in researching financial products and services.
According to a global survey conducted by the London Stock Exchange Group and ThoughtLab, 62% of wealth management firms anticipate that AI will profoundly reshape their operational frameworks. The survey highlights numerous advantages of adopting AI, including enhanced automation and speed, a decrease in manual errors, and overall cost savings. Furthermore, AI enhances the investor experience through continuous connectivity, user-friendliness, cross-device accessibility, and reduced expenses.
However, the findings indicate that AI should not be seen as a standalone product; its true value lies in augmenting the capabilities of human advisors and facilitating skill development within the industry.
Trust remains a cornerstone of the advisory relationship. When asked about the most significant value advisors can provide in the next three years, nearly half of current investors, along with over half of non-investors, cited the delivery of trustworthy investment advice as paramount. Additionally, about one-third of all investors appreciate how advisors assist in holistically addressing both financial and personal life goals, offer innovative investment strategies, and are readily available, particularly during challenging times.
The report suggests that a blended advisory model, merging human expertise with AI capabilities, is likely to become the norm. Investors are generally receptive to the application of AI throughout their investment journeys, with over 90% supporting its use for product and service research and more than 80% endorsing its role in assisting advisors with portfolio management.
Sune Mortensen, Head of Wealth Solutions at LSEG, comments on the competitive nature of the wealth management sector, noting that firms and advisors face significant pressure to attract, engage, and retain clients. “The rise of AI and other technological innovations necessitates a reevaluation of business strategies and client engagement models,” Mortensen states. “There is an increasing demand for demonstrating value while efficiently managing higher trading volumes.”
For those interested in the evolving challenges and opportunities AI presents to the banking sector, details will be shared at Finextra’s inaugural NextGenAI conference on November 26, 2024.