How Much Does AI Matter To Your Clients? The Answer Might Surprise You – Episode 41
Unless you’ve been living under a rock, you know that artificial intelligence (AI) has rapidly become one of the most talked-about and game-changing technologies ever. It’s increasingly becoming part of more and more industries—including, of course, wealth management.
Like any new, rapidly evolving technology, AI has its pros and cons—and its cheerleaders and detractors. But what do your clients think of it? And how important is it to them that you bring AI-enhanced services and solutions to their financial lives?
To answer such questions, CEG Insights surveyed more than 1,300 investors—84% of whom have a net worth exceeding $1 million.
KEY TAKEAWAYS
- You’re very likely to lose your HNW clients if you’re hacked by cyber criminals.
- Proactively educate clients about your firm’s cybersecurity efforts.
- Use real-world examples to highlight how you’re protecting clients.
FACE THE FACTS
Perhaps not surprisingly, different generations have distinct opinions about AI. Baby boomers may be curious about it, but they generally don’t expect it to be involved in their financial decision making.
Millennials, however, show a real interest in AI. Close to half (44%) of Millennials are enthusiastic about having AI used in financial services. That’s important when you consider that Millennials represent the single largest segment of the wealth market today. What’s more, one of the best niches to serve—affluent entrepreneurs—is largely made up of Millennials.
The upshot: If you plan on serving Millennials—and you probably should—you’ll need to pay attention to AI.
Among HNW investors who want AI involved in their wealth management efforts, here’s some of what they expect to see from their advisors:
- Nearly 40% of Millennials and 30% of Gen Xers says it’s somewhat or very important to use AI to help optimize their investment management, tax planning and estate planning.
- Nearly 40% of Millennials also want AI to be used for enhanced security such as data protection and fraud detection.
- Roughly one-fifth of Millennials want to see AI play a role in creating investment recommendations, identifying market trends, and visualizing data to better understand their investments and financial projections.
This research strongly suggests that the big value promise of AI will be about personalization. We know the affluent want customized, personalized solutions—and we know that being truly customized is challenging for advisors. Going forward, it’s likely that AI will empower advisors to be more flexible and design solutions around each client rather than trying to fit groups of clients into certain models or templates.
INSIGHTS INTO ACTION
- Educate yourself about AI applications. There are so many resources out there to help you understand how AI works as well as how to make it work within your firm. One of the best ways to use AI today is to boost efficiencies within a practice. For example, AI can help advisors create emails, presentations and other communications much faster.
- Talk with clients about AI. Find out what your clients think about AI and how they might want it involved in their finances. As you integrate AI into your processes, let clients know how you’re using these tools and the ways in which these tools can benefit them. In particular, highlight ways that AI is allowing them to receive a more customized, bespoke wealth management experience.
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