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Wealth managers should embrace their AI sidekick


Sometimes, I like thinking that AI stands for Assisted Intelligence and not Artificial Intelligence. It helps me think about how all these mind-blowing advancements in generative AI could and should be best used.

It is common to come across people who are concerned about the risk of AI replacing a human role. This is not surprising as technological advances have typically resulted in some form of automation and replacement in the past.

At a time when advisory firms face growing cost pressures, challenging markets, and a consumer duty deadline that is drawing ever nearer, should the current AI tsunami be a trigger for us to earnestly consider the opportunity that generative AI technology could bring?

AI as assistive technology

AI does have huge potential within the wealth management space but our instincts often go to how AI can support clients to self-serve more. Robo advisory comes to mind, where clients’ full-service needs are met by an AI assistant. The popularity of this approach is undeniable, with Robo-advisor AUM projected to reach US$2.76tn this year

The draw is obvious as lower fees, accessible start-up capital requirements, and an out-of-the-box experience appeal to a wider audience. However, while effective for more straightforward investment styles, the lack of human interaction means more complex strategies are effectively off the table. 

On the other side of the coin, for advisers, entering into the mass affluent market comes with certain caveats. By its nature, they can’t expect to charge the same amount as they would their high net-worth counterparts or afford to dedicate as much time to these clients. 

The answer lies in a hybrid approach, leveraging the best of AI to compile information, make recommendations, or take care of time-consuming processes. What’s left is pure value; that is the adviser’s value as an experienced, human-centric source of information and reassurance. 

Overcoming barriers to adoption 

We can be forgiven for believing that the adoption of any technology is tied to the value it offers an adviser. If it assists advisers to do parts of their job more easily or helps them focus on the core service they offer – the advice they provide –  then they are more likely to use it.

That’s the theory, anyway, and logically it should work this way. But the reality is often different and we must overcome frequent barriers to adopting new technologies for this to work. These barriers may be to do with mindset, the time associated with onboarding, level of familiarity with current technology, or even fear of replacement. 

Anecdotally, I believe that the last point – fear – represents a substantial deterrent in willingness to embrace AI. Unless you’ve been living under an enormous rock, the furore around Open AI and Chat GPT is enough to make professionals in almost every sector a little uneasy. The idea that you can pop in whatever you want and get a competent answer is daunting. Our minds wander and we think that engaging in any way with the technology is a step on the road to being replaced. 

Whether it is due to fear or the other reasons mentioned, the negative results of poor technology uptake can be seen across sectors. In fact, a reported 78% of businesses fail to scale or maintain their digital transformation initiatives. Unsurprisingly, much of this is due to cultural attitudes or mindsets, rather than an inherent ineffectiveness of the technology. 

Overcoming latent fear or convincing the perceived ‘tried-and-tested’ methods to be set aside for newer approaches is an emotional battle as much as a logical or business-orientated one. For example, a McKinsey report found that 60-70% of wealth managers’ time is spent on non-advisory-related tasks. No adviser wants to spend that much time on satellite tasks. So, what’s stopping them if not the weariness of the unknown?

Statistically, the value is there for advisers both in terms of reducing personal workload and enhancing their ability to offer specialised support to a broader group of clients. We just need to see AI as a sidekick rather than a threat.

Embracing AI as an adviser sidekick

At Unblu, we strongly believe in using AI to assist advisers as well as clients. We envision a digital assistant that can support an adviser during every client interaction with insights about the specific client, make product suggestions to an adviser that fit their client’s risk profile, or provide assistive tasks like producing a summary of a call to free up time for more client engagement.

With the focus of this technology delivery being directed to the adviser, it is a tool that can help strengthen the trust between them and their clients. The adviser is augmented to help provide a more valuable service to their client but fundamentally, they are still the ones delivering that service to their clients through their relationship.

I, for one, think that AI will help improve the wealth industry but we must be smart enough to ensure that it must support and assist advisers to enhance their client relationships as opposed to replacing them.