February 19, 2024

How can AI help wealth managers do what they love the most – Part 2

In Part 1, we looked at how AI can help reduce the friction around non-core activities that wealth managers seemingly spend the majority of their time on.



Now let’s look at how AI can help boost productivity in core activities.



Travels and events (AI Impact = low)


Travelling to see clients is likely more important than attending events and the former should be prioritised. However, it is difficult to see how AI could help other than improving the travel booking process or analyzing travel budgets to see what cost savings could occur on future bookings.



Commercial preparation and investment (AI impact = high)


Commercial preparation typically relates to preparing for a client meeting, whether it is for a review or to suggest an investment.


Preparing for these meetings usually requires gathering information from several different sources. Broadly speaking, this is what an advisor should be looking at with respect to client’s investments:


  1. What’s going on in the world that may affect the client’s portfolio and recapping how past events have already impacted its performance and composition
  2. Assessing whether any adjustments or recommendations should be made, based on the client’s current attitude to risk and their ongoing financial goals


Taking advantage of AI models that work on tagging and NLP could significantly cut down time needed around research and news gathering. AI could support firms and advisors by summarizing key news stories and events related to the macro environment, look at what institutional research houses are publishing and more specifically, AI can look at specific news and research that directly relates to the client’s portfolio.


Additionally, AI can aid wealth managers with answering key questions around the portfolio, and suggest client specific recommendations about investment strategies and offer proactive support based on a customer’s investment goals and risk profile. By analyzing large amounts of data, AI can identify patterns and trends that would be difficult for humans to spot. This information can then be used to create customized investment plans for each client.


For those who want out of the box simplicity, illio’s engine gives you the answers without you needing to ask the questions. Our engine automatically finds the facts around each portfolio that are most likely to affect the client’s risk and future performance and share these with you in the form of Insights across the portfolio.




Client interactions (AI impact = high)


AI would be beneficial for low level transactional interactions. AI-powered chatbots can help wealth advisors improve their client interactions by answering client questions and providing support 24/7. AI can also be used to develop personalized client communication plans.


As we’ve seen in the previous article, tasks like onboarding clients or client vetting could be supported by AI chatbots to gather client information such as their attitude to risk and/or investment goals. 


Additionally, AI note taking and transcribing tools can help the advisor create post call summaries, next steps and allows for easy searches within the conversation.



Portfolio management (AI impact = high)


AI’s impact here is similar to its use cases in commercial preparation and investment, as portfolio management is simply the ongoing due diligence needed to ensure the client’s financial performance is on track to meet their goals.


As such, utilizing AI, wealth managers can receive compressed analytical workflows to get the answers they need quickly, and take advantage of any personalized recommendations and changes suggested. This is why we created our own Insights engine to help this process.


Furthermore, AI can also help wealth managers to better manage risk by analyzing historical data, so that it can identify potential headwinds and develop strategies to mitigate them. It can also aid in timing rebalancing strategies or suggest different asset classes or new investments which may have better risk-return profiles to give the client a better outcome.


We’ve now looked at different ways in which AI could support wealth firms and wealth managers across both their core and non-core activities. Companies like illio are already integrating AI into their offering, thus increasing productivity of advisors and client engagement. There are many more opportunities for firms to support their advisors and work on better the client relationships. 

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