Artificial intelligence is set to revolutionise the wealth management industry, with nine in 10 investors believing the technology can used effectively for researching financial products and service.
AI continues to shape the sector, with 62% of wealth management firms acknowledging that it will significantly transform their operations, according to a global survey of 2000 investors from the London Stock Exchange Group and ThoughtLab.
Respondents cite a host of benefits that an AI-enabled approach offers, including greater automation and speed, a reduction in manual errors, and cost-effectiveness. AI also appeals to investors by promising constant connectivity, ease-of-use, cross-device access and lower costs.
However, the report finds that AI itself cannot serve as the final product; rather, it enhances the role of advisors and functions as a tool for capacity building.
Trust remains integral to the advisory role. When asked what was the greatest value that advisors could bring in the next three years, almost half of investors who currently use an advisor, and more than half of those who do not, believe the primary value of an advisor in the next three years is in providing trusted investment advice.
Around a third of all investors also value equally how advisors help to holistically meet financial and life goals; provide innovative investment ideas approaches and opportunities and; are available when needed, especially in difficult situations.
The report suggests that a hybrid advisory model, blending human expertise with AI, will become the standard. Investors are generally open to AI being used in their investment journey, most prominently for researching financial products and services (over 90%) and supporting advisors in portfolio management (over 80%).
Sune Mortensen, head, wealth solutions, LSEG, says: “In the competitive wealth management industry, we understand the immense pressure that wealth firms and advisors face in attracting, engaging, and retaining their clients.
"The prevalence of AI and other technological advancements are also making wealth managers rethink their business strategy and client engagement models. There is a growing need to demonstrate value as well as effectively manage increasing trading volumes.”