How Wealth Managers are Using AI Tools to Improve Client Experiences

AI’s growing role in wealth management: Artificial intelligence is becoming increasingly prevalent in the financial advisory sector, offering enhanced digital experiences and improved outcomes for both investors and advisors.

• TIFIN AG showcased an AI solution that analyzes client behavior data and identifies trends, providing advisors with intelligent insights to grow market share and prioritize high-potential prospects.
• The focus on AI-driven tools aligns with wealth management’s key growth drivers: new customer acquisition, retention of existing customers, and AUM growth.
• As AI adoption increases, wealth management firms must balance innovation with regulatory compliance, emphasizing the use of explainable AI tools that provide trust, transparency, and clarity to “black box” systems.

The Great Wealth Transfer reshapes investor demographics: Wealth managers are adapting their strategies to attract and retain a changing investor base, particularly focusing on the growing “validator” segment.

• Validators now represent the largest investor segment in the US (42%), with an average age of 43 and high average incomes of $106,000.
• This demographic prefers mobile channels for investment activities but also values in-person and voice communications with financial advisors.
• Wealth management firms are driving loyalty by offering user-friendly digital channels combined with flexible advisor communication options, creating an optimal hybrid experience to serve the next generation of investors.

Digitizing end-of-life planning: WealthTech firm illuminote presented a novel digital solution to address challenges in the probate process and end-of-life planning.

• The platform offers a digital registry to authenticate and register legal documents such as trusts, powers of attorney, and wills.
• By streamlining the probate process and ensuring the protection of final wishes, illuminote appeals to customers seeking an easier end-of-life planning experience.
• This innovation represents a step towards modernizing the legal industry through standardized digital records.

Democratizing investment access: Eko Investments demonstrated a white-label investment solution aimed at making stock market participation more accessible to the mass market.

• The platform allows banks, credit unions, and FinTechs to offer investment solutions to their customers with a low entry point of just $10.
• This turnkey solution provides smaller financial institutions with a rapid way to expand their product offerings and enter the wealth management space.
• Eko’s approach aligns with the predicted trend of wealth management as a service (WMaaS) gaining traction in the market.

Looking ahead: The inaugural wealth management track at Finovate showcased the industry’s focus on technological innovation, personalized experiences, and inclusive financial services.

• The event highlighted the industry’s commitment to leveraging AI, addressing demographic shifts, and expanding access to investment opportunities.
• As these trends continue to evolve, wealth management firms will need to stay agile, balancing technological advancements with regulatory requirements and client needs.
• The success of this first-ever wealth management track suggests potential for expanded coverage and discussions in future Finovate events.