Artificial Intelligence (AI) in Wealth Management

Artificial intelligence (AI) is making a growing impact across many industries, including financial services. While most clients still value the personal connection of working with a human advisor, the role of AI in wealth management is becoming increasingly hard to ignore. A 2024 Broadridge report found that 35% of advisors plan to use AI tools for their marketing efforts.¹ If you’re aiming to grow your practice, it’s worth considering how this technology could support and enhance your strategy.

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What Is AI in Wealth Management?

Broadly speaking, artificial intelligence (AI) refers to a body of capabilities and technologies designed to teach machines to think like humans. AI in wealth management describes the use of these technologies to provide financial advice, specifically with regard to forecasting the performance of investments or mapping trends in the market.

Distinct AI subsets include:

• Predictive and generative AI: Predictive AI aims to generate predictions or projections, based on existing data sets or trends. Generative AI, meanwhile, seeks to produce new data or content based on existing data. 
• Machine learning: Machine learning is another type of AI that helps computers learn by finding patterns in data. AI systems can then make predictions based on the recognized patterns. 
• Large language models (LLMs): Large language models can generate language that is natural and human-like, based on observations of language patterns and data. 

Could AI replace human wealth managers? Not entirely, as AI still has its limitations. But it does hold promise for advisors who are willing to take a chance on this technology. 

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Advantages of Using AI in Wealth Management

Financial advisors and wealth managers can reap numerous benefits by embracing AI technology. Some of the key advantages center on AI’s ability to help advisors:

• Increase efficiency
• Streamline systems and implement automation
• Nurture relationships with existing clients
• Generate leads to connect with new clients
• Develop effective marketing strategies
• Quickly analyze data
• Remain compliant with regulatory guidelines

Those are all things that can prove challenging to financial advisors and wealth managers. AI has the potential to ease some of those pain points, enabling advisors to save time and money while focusing on growing their businesses.

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AI in Wealth Management Use Cases

How is AI used in wealth management? The short answer is that AI is primarily meant to be a problem-solver. But if you’re looking for more specific examples of how AI can potentially help financial advisors, here are some of the most common AI use cases in wealth management:  

Marketing

Whether you’re a newly independent advisor or your firm has a decades-long track record, marketing is a critical component of your growth plan. Developing and implementing a marketing strategy can be time-consuming, however, leaving you with less time to serve clients. AI tools can help you boost your brand’s visibility while freeing up hours in your day. 

For example, here’s how advisors in the Broadridge report said they planned to use AI for marketing:

•  Generating personalized content (62%)
•  Personalizing marketing campaigns (45%)
•  Automating admin tasks and communications (41%)

Using AI to inject some personal details into your content is a wealth management marketing approach that could prove fruitful. In a joint study by Dow Jones and Broadridge, 42% of investors said advisors could add value to their communications by adding content that’s tailored to their lifestyle, goals and interests. ²  

Lead Generation

Attracting new clients is often one of the most difficult parts of being an advisor or wealth manager. AI can help streamline this process by quickly analyzing large volumes of historical and real-time data to pinpoint high-potential prospects with greater accuracy.

For example, AI tools can scan social media and other publicly available data to identify individuals who match an advisor’s ideal client profile. This can significantly cut down on the time and effort typically needed for lead generation. In the Broadridge report, 22% of advisors planned to use AI to segment client and prospect lists. 

An advisor marketing platform can also help you generate leads. For example, the SmartAsset Advisor Marketing Platform (AMP) equips fiduciary advisors with powerful tools to automate lead generation and marketing. This subscription-based service provides leads and enables advisors to create and manage personalized nurture campaigns through automated email and text outreach. Discover how SmartAsset AMP can support your growth today.

Client Retention

After acquiring new clients, retaining your existing client base may be a top priority. You may also be looking for ways to bridge gaps across generations within your client roster. AI can help with that by enhancing the client-advisor relationship.

What does that look like in action? Here are some possibilities:

• An advisor may use generative AI to create social media content or email marketing content to help boost engagement and spark conversations. 
• AI agents can also help meet client support needs when you’re not readily available. AI agents can answer questions, help clients navigate your firm’s website, and handle administrative tasks like onboarding. 
• If you ask your clients to complete a satisfaction survey, AI tools can help you analyze the results and pinpoint opportunities to improve their experience with your firm. 

Compliance Management

Staying compliant with financial planning regulations is another important part of your business. Failing to do so can result in fines or other penalties. One of the biggest challenges is keeping up with evolving rules while ensuring current guidelines are met.

AI can help lighten the compliance burden by automating routine tasks and monitoring regulatory changes on your behalf. Rather than manually reviewing updates, advisors can rely on AI to analyze new information and flag what’s relevant. These tools can also generate reports that highlight potential gaps in your compliance strategy, helping you stay proactive and informed.

For example, an AI-powered software program for new client onboarding can monitor each step of the process to check for compliance issues. That includes ensuring that all Know Your Client (KYC) rules are being observed and client identities are properly verified. 

Investment Advice

As an advisor or wealth manager, giving advice is central to your role. AI can help to simplify that task by analyzing data sets to help you provide a greater degree of personalization in your recommendations to clients.

That’s something you can already see at work in robo-advisory platforms. There are platforms that use AI algorithms to identify investment decisions that align with client needs, goals and risk tolerance. While robo-advisors are no substitute for human financial advisors, they’re a good example of how AI is already being used in wealth management.

Market Trend Analysis

AI can be a useful tool for analyzing market data to identify trends, as well as tracking sentiment. Sentiment analysis looks at how opinions are formed in real time.

From an investment perspective, wealth managers and advisors might find that useful when making portfolio recommendations to clients. If an AI-based market or sentiment analysis reveals that perceptions around a particular stock are trending negatively, for instance, that could influence what type of advice they give to clients about that investment.

Increased Efficiency

AI can help to free up time in your daily schedule if you’re using it to automate routine tasks that are not central to your business’s growth. For instance, you might deploy AI technology to automate your accounting processes, including account reconciliation and invoice tracking.

Client meetings present another opportunity to leverage AI. AI-driven note-taking tools can record your conversations with clients, take detailed notes, summarize them into a scannable report, and send a personalized follow-up email to your clients once the meeting concludes. That leaves you free to practice active listening and fully absorb your clients’ concerns and questions. 

Data Centralization

Working with a larger client base means more client data to maintain. AI can make it easier to organize, maintain and share data in accessible ways, which may be particularly helpful when you’re working for a firm that employs numerous advisors.

For instance, using AI to collect data could help with streamlining the onboarding process for new clients. You could also use AI to clean up old data records to account for clients who have left your firm.

Implementing AI in Your Advisory Business

Adopting AI requires a strategy and plan to ensure a smooth journey as you venture into new territory. If you’re interested in incorporating AI into your wealth management firm, here are three common tips to keep in mind:

• Identify your goals: AI has myriad potential uses, but it’s important to think about how it could specifically be of use to your business. In the early stages of adoption, you may want to focus on just one or two areas for implementing AI as a test to see how much value it actually adds.
• Understand the cost: New technologies are most useful and beneficial when they can save you time and money or help increase revenue generation. Analyzing the costs of AI adoption against the projected benefit can help you estimate your firm’s return on investment, both in the near and long term.
• Make it a team effort: In order for AI to be used effectively, everyone in your firm must be on board. Getting feedback from your team about their concerns or expectations surrounding AI matters, as does ensuring that everyone on the team is properly trained in its use and application.

Bottom Line

While the adoption of AI in wealth management is still in its early stages, its presence is expected to grow significantly as more advisors begin to explore its potential. From streamlining operations to enhancing client insights, AI offers tools that can make practices more efficient and responsive. Even if you’re not currently planning to integrate AI into your workflow, it’s important to consider how this technology could reshape the financial services landscape in the near future.

Tips for Growing Your Advisory Business

• SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• Digital marketing can be an effective way to increase your brand’s visibility and potentially connect with new leads. If you’re not investing much time or energy into social media marketing or email marketing yet, you might consider how you can use AI to simplify some of those tasks. For example, you could use a tool like ChatGPT to create social media content that you can then schedule to post to your account profiles automatically.

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