Wealth Management and Advisor Tech Trends

When we asked our contributors to discuss the technology themes that will have the greatest impact on enterprise wealth managers this year, we had little idea they would be so aligned. But they are—to a person, they talked to us about how artificial intelligence is poised to advance the industry.??

This maps closely with Advisor360°’s recently released research. Sixty-four percent of the advisors we surveyed in the 2024 edition of our award-winning Connected Wealth Report believe generative AI will be a positive for their practice and 57% said it will benefit the wider industry.?

As you’ll read, contributors Scott Reddel , Sheryl Rowling , Jed Maczuba , and Mat Mathews discuss AI’s potential to help advisors be more productive at work and serve clients better. They also predict that AI and related tech advancements will improve advisors’ ability to serve younger clients as wealth is transferred from one generation to the next.?

I hope you enjoy this edition of Connect360° newsletter—please leave a comment and follow us on LinkedIn to join the conversation.?

Cynthia Stephens ?

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2024: A new generation of wealth management and advisor tech ?

Our contributors this month predict that the continued proliferation of generative AI applications will have a major impact on the industry again this year. ?

According to Mat Mathews, SVP of Product Management at Advisor360°, “we will see AI and machine learning tools assist financial advisors with practice management and aid advisors and investors with financial planning.” He also suggests that AI- and data driven ‘next best actions’ and insights “have the potential to be the single biggest game changer in the industry." ?

Scott Reddel, Managing Director and Wealth Management Lead at Accenture agrees, saying “the latest applications go well beyond chatbots—they can pick up a lot of advisors’ labor-intensive tasks like preparing presentations for clients and querying service requests about different types of activities, as well as answering numerous ad hoc questions coming into the firm in real time.”?

Sheryl Rowling, Editorial Director of Financial Advice at Morningstar, argues that a second tech topic to watch in 2024 is a workforce-oriented issue. “Wealth managers that want to retain employees are faced with a multi-dimensional problem,” she explains. “How can they engage employees and enable real collaboration when people don't want to come into the office for work? This requires greater reliance on known and new technology to ensure smooth communication and operations.” ?

Finally, Jed Maczuba, Advisor 360°’s Chief Technology Officer, talked to us about how and why enterprise wealth firms can use data and AI to better serve the next generation of clients, noting that “younger clients have different needs and preferences across virtually all dimensions of the current wealth management business.”?

These interrelated themes—AI, shifts in advisor tech needs, and tools for serving the next-generation of clients—dominated our conversations with contributors this month. Let’s examine how these ideas will impact firms, advisors, and clients in the coming year.?

Shaking up the industry?

Our contributors are clear on one thing: AI and other trending technology advancements will have a huge impact in the short- and long-term for firms across the industry. ?

According to Maczuba, “automation done well will notably reduce inefficiencies and increase profitability for firms. To really get it right they need technology partners to help brainstorm solutions and understand what's possible with AI and automation in its next critical phase.” ?

Maczuba made the point that effective integrations and flexible solutions will make AI advancements far more effective. “How FinTech providers and wealth management firms collaborate to harness the power of AI technology for improved operational efficiency, enhanced business management, and more personalized content will separate the winners from the losers,” he surmises.?

Reddel concurs, saying, “generative AI stands out as the biggest challenge and opportunity for firms to get right.” He went on to suggest the technology not only enables better decision-making across the business but is also poised to be a key factor in firms’ ability to meet their growth goals. ?

According to Rowling, “AI will revolutionize financial practices. It won't be immediate, but the trend cannot be ignored, just as computers could not be ignored in the past. Firms that don't take advantage of what AI can do will fall behind the competition.”???

“If wealth management firms don’t make adjustments now, they stand to lose out on billions of dollars in new business in the years to come.”—Jed Maczuba?

A new landscape for advisors?

Our contributors’ comments connect the dots directly between AI and new skill demands placed on the evolving advisor workforce.??

“The proliferation of generative AI highlights the need for a new generation of ‘intelligent advisors’—professionals who can coordinate a deep level of advice by teaming-up with a broader set of financial specialists within their firm,” Reddel says. “Bigger organizations are already starting to push out new capabilities and tools to their advisors and we expect this trend to accelerate.” ?

Mathews notes that it may take time for advisors to gain to their footing and build trust in these fast-moving advancements. “They need the opportunity to test tools prior to direct client exposure—creating emails or texts that need to be verified prior to being sent to a client is a great example of letting the advisor feel ‘in control’ while leveraging the new tech,” he says. “Ultimately, these tools will allow advisors to better serve their clients and scale their business without sacrificing high quality client service.”?

Maczuba reinforces the importance of AI and reminds us about the role of data. “Data will drive AI applications for advisors—but the data needs to be reliable.” He also mentions the upside for advisors and their clients. “Harnessing the vast amount of data available will help advisors gain better insights into their future clients. It can help advisors build a bridge to the next generation of their business and meet the younger investors where they want to be.” ?

“With a large percentage of advisors in the industry approaching retirement age, there is tremendous opportunity for younger professionals to make their mark with these new tools.”—Reddel?

And what about clients and investors??

While it is important to understand how these technology trends will affect the industry and advisors, it is equally critical to think through how they impact the clients they serve. ?

Referring to AI and automation, Mathews says, “these trends are positive for investors in several ways. Whether it’s easier access to educational material and self-service tools, or clearer insights or actions they should be considering—there’s tremendous upside.” He went on to say, “providing investors and their advisors timely insights and education will enhance the investor experience and truly provide a holistic wealth management experience.”?

According to Reddel, “from the client’s seat, you can expect advisors who are utilizing AI and automation-based technology to be more responsive and better able to deliver personalized services. This technology will free up advisors’ time to focus on the tasks best suited to their skills." ?

Moving beyond AI specifically, Maczuba says the next generation of investors “has different needs and preferences across virtually all dimensions of the current wealth management business. Winning over Millennial and Generation Z will require firms to revisit the ways they operate and interact with their customers or lose out on billions of dollars in new business in the years to come.”?

Bringing the conversation full circle, Rowling explains how AI and generational preferences come together. “The new tools will make it easier to keep up with client needs and make it possible to provide virtually instantaneous information. Older clients will likely need more human contact, while younger clients will expect technology to improve the quality of service—that can only be achieved through AI implementation.”?

“Capturing the next generation of investors is more than adding a mobile application on top of the existing experience, it will require a reinvention of the customer journey. –Jed Maczuba ?

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Please leave a comment and let us know how you enjoyed this conversation around wealth management and advisor tech trends. See what other industry experts are saying about the biggest trends in 2024 here .?

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About our contributors:?

Sheryl Rowling , Morningstar?

Sheryl is CPA/Personal Financial Specialist with 30 years of experience in taxation, financial planning, investment management and wealth advisory services. She is also the founder of Total Rebalance Expert - TRX and author of CCH publication "Tax & Wealth Strategies for Family Businesses".?

Scott Reddel , Accenture ?

Scott Reddel is a managing director at Accenture and leads the North America Wealth Management practice. Scott serves as executive lead for Accenture’s top wealth transformation client initiatives and drives partnership engagement with the WealthTech and innovation ecosystem.???

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Mat Mathews , Advisor360°?

Mat Mathews oversees and supports the Product team with all future and existing initiatives. Mat is skilled in complex technology markets and focused on distilling strategies into compelling stories and driving action by building and motivating high-performance teams.?

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Jed?Maczuba , Advisor360° ?

Jed leads a globally distributed and diverse team of technologists responsible for building and operating the company’s market-leading, award-winning, innovative products and platform. Jed oversees Advisor360°’s Data, Platform, and Product Engineering teams and is responsible for accelerating research and development across the platform and spearheading development of future product capabilities.?

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Learn more about advisor tech trends here: https://www.advisor360.com/2024-connected-wealth-report https://www.advisor360.com/resources/financial-planning ?