Date: 30-May-2023
Financial advisors are already exploring the transformative potential of artificial intelligence (AI) in their industry. The AI in Wealth Management Report by Accenture found that 87% of financial advisors want to implement AI more into their daily activities.
Explore how advisors can expect AI to affect the client experience, risk analysis and portfolio management.
As a financial advisor, your role is to provide clients with the best strategies for reaching their financial goals. But the client experience is also crucial, as that’s what builds trust in your abilities. AI has the potential to help financial advisors improve the client experience from beginning to end.
AI-assisted tools can help even before the relationship begins, with algorithms analyzing prospective clients and how you can tailor proposals to their needs. AI can also speed up onboarding by walking clients through important steps and only bringing in an advisor as needed.
Algorithms can also help you automate and customize much of the client management process, such as preparing for client reviews — allowing you to focus on personal interaction while still providing a seamless, tailored experience. Even the personal side of the client relationship could benefit, with Accenture noting that 40% of financial advisors want AI’s help in analyzing client emotions.
For financial advisors who produce content and other communications for their clients, some are already using ChatGPT to produce or summarize various forms of text-based content.
Financial advisors understand the importance of risk management and analysis, both for the client’s investments and for their peace of mind. AI-powered risk tools have the potential to increase the speed and accuracy of client risk profiles, as well as speeding up the creation of strategies that can protect clients.
When fed the right data from sources such as credit reports, financial statements and tax returns, AI systems can quickly create a comprehensive picture of each client’s financial situation and risk profile. AI analyzes large datasets quickly, saving time without sacrificing the quality of financial recommendations.
AI can also automate certain risk analysis tasks. For example, machine learning algorithms can analyze a client’s investment history to help determine how much risk to take on.
Computers have long assisted with portfolio management and investing decisions, and AI has the potential to further automate these decisions based on speedy, near-real-time data calculations. AI-powered portfolio management systems can provide personalized portfolio recommendations that are tailored to a client’s specific needs, risk tolerance and investment objectives.
However, financial advisors will need to understand how these tools work and how to explain their value to clients. For example, a client might ask whether an AI tool is using historical data or real-time information to make investment recommendations.
Before adopting AI-powered tools, advisors should make sure they’ve answered questions about the tool’s security features, the provider’s data collection and sharing policies, how the AI makes decisions and whether there’s human oversight.
Subscribe to our Ebix blog or curate your subscriptions for the most relevant content and never miss a single article! Industry driven thought leadership delivered straight to your inbox with the click of a button. What could be easier?
