How is Artificial Intelligence helping advisors?

By Abhinav Gupta – FinTech Product Leader

Financial advisors have had to face many challenges in recent years, such as the rise of robo-advisors and the increased competition from fintech startups. However, artificial intelligence and machine learning tools are helping them in their constant battle for client loyalty.

Big Data and Machine Learning technologies have brought about a new playbook for the WealthTech industry. One of the most important takeaways from that playbook is that it is now possible for financial advisors to create and distribute a hyper-personal product for each customer’s needs and risk profile.

Machine learning offers a level of personalisation that goes well beyond the kind of advice that a human advisor could provide. By using data and algorithms, advisors can now create customised portfolio recommendations for each client, based on their individual fears, wants and desires.

Investors today need more data and information regarding the trends, viewpoints of Influencers and actionable insights

The hottest active investors in the world which is the result of their increased access to information

AI is the future of wealth management and the wealth management industry is seeing a growing trend towards the use of AI., said Steve Sylvester, the global chief operating officer at BlackRock.

How is Artificial Intelligence helping advisors?

1. Acquire, attract and convert prospects
2. Client engagement and Client Retention
3. The challenge of hyper-personalization in wealth management
4. Automate workflows so that advisors get more time

I think the biggest change in the Wealth Management industry is the transactional shift of KYC ( Know your Client) to KCYC ( Know and Covert your client) as a framework. Gone are those days when cold calling would help advisors get new clients.

When the phone rings. You don’t recognize the number. Next move? Block. Obviously.

Turn to your computer. Oh, boy. An email from a stranger about inflation and your retirement strategy. Delete.

Old ways are definitely not working anymore, so how do financial advisors discover hidden connections to prospects? Advisors need to figure out who in their circle can make personal referrals that are also worthwhile.

AI is allowing financial advisors to discover hidden connections to prospects

Advising clients regarding wealth management, insurance, and investment is a complex process and requires a lot of effort. Financial advisors are always on the lookout for ways to improve customer experience, boost customer loyalty and improve customer service.

Personalisation is the key to Retention and Growth for Financial Advisors

In the “Next in Personalization” report, management consulting firm McKinsey found Americans are increasingly likely to shop around, and that brand loyalty hinges on customization.

Among consumers:

  • 71% expect tailored interactions with businesses
  • 76% become annoyed if this personalization fails to happen

Advisors have only 24 hours in their day and they wish they had more; they want to make the best use of their time; recent trends have shown that larger advisors have outsourced proposal creation based on Investment research to third parties, and now they come with investment research, goal-based planning and personalisation for the client. The advisor goes to a client meeting and presents his recommendation to the client.

So advisor needs real-time data of the current client portfolio and market trends to need to understand and benchmark their portfolio to risks and returns across their clients, and create or leverage asset models from the asset managers. The client agrees on recommendations, place trades etc. etc., too much data to be processed.

Financial advisors are using AI and ML to automate a decision support system that empowers financial advisors to focus on what they do best while creating a better client experience.

I need a product that enables me to provide automated, personalized, and proactive advice so that I can spend more time with more clients – NJ-based RIA

About author: Abhinav is a Fintech Product Leader and an Engineer by qualification, having built several Fintech products using AI/ML and Data Analytics. Having over 18+ years of experience in building enterprise B2B SaaS products for fortune 500 companies like State Street, Broadridge, JP Morgan, Bloomberg etc.