Madison Eubanks

Sep 24, 2024

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4 Ways AI is Shaping the Future of Wealth Management

Whether your firm embraces or resists it, artificial intelligence (AI) is here to stay in the wealth management industry. 

Since the release of ChatGPT in 2022, use cases for AI in day to day processes have taken off, with nearly three quarters (73%) of US companies using AI in some aspect of their business. 

Recently, Vanilla hosted a panel of three AI thought leaders to discuss how AI is being incorporated in the wealth management and financial technology spaces: Amjad Hussain, CTO, Vanilla; Parker Ence, Cofounder and CEO, Jump; and Greg Matusky, Founder and CEO, Gregory FCA Public Relations. 

Here, you’ll find some of the key takeaways from their conversation. The full recording of their discussion and Q&A can be found here.

How AI impacts financial advisors and wealth management firms

Takeaway 1: AI innovation is happening very quickly

If you feel like the introduction and adoption of AI has happened at lightning speed, it’s because in many ways it has. 

“We know that this was the quickest adopted technology in the history of technologies, and that one of the reasons was because it was non-prescriptive—it wasn’t meant to do one single thing,” Greg said. “It allowed us to say, ‘How could we apply it in our own industry? That opened a lot of opportunities.” 

Despite the fact that AI research has been going on for decades, the introduction of ChatGPT and OpenAI marked the first time it became accessible to the general population. 

“Just like with any new transformative technology, it’s gone through periods of early adopters, but I think we’re still early in the life cycle of where AI will take us,” Amjad added. “You can already see the semblances of transformations in different industries, whether it’s what they’re doing at Jump or what we’re doing at Vanilla. I think the story is yet to be written around where this journey will lead.” 

Takeaway 2: AI is an accelerator, not a replacement

With AI, one of the biggest elephants in the room is the fear that it will eliminate jobs—and there’s some truth to that in some cases. However, the panelists agree that the role of a financial advisor is unlikely to ever be fully replaced by artificial intelligence. 

“I don’t think it’s going to affect [financial advisors], because this is one of your life’s biggest decisions as a client. Right? How you’ll prepare for your future, for your retirement, for your family, secure your family,” Greg Matusky said. “Those kinds of moments are always going to require a human being in front of you.” 

Rather than thinking of AI as a potential human replacement, advisors should focus on how they can leverage AI to help them do their jobs more efficiently. 

“AI can help [advisors] be able to spend more time in the week with their clients face to face, which is generally what they love to do, and less time on all the admin work,” Parker Ence noted. “That’s just a much better experience for the advisor, not to mention for the client as well.”

Takeaway 3: AI can impact business success

In the webinar, Greg shared data points from his firm’s recent survey revealing that AI can actually reduce client churn and promote employee retention. The study found that using AI to automate day to day tasks led to: 

• 34% reduction in client churn. By reducing tedious processes, employees had more time to interact with clients on a personal level and strengthen the relationship.
• 54% decrease in employee attrition. According to Greg, when people feel they can spend their workday focusing on the real purpose of their career, they tend to feel more fulfilled. 

“Additionally, [the firms in the study] have the advantage of retaining advisors longer because they feel as if they’re learning skills they wouldn’t learn at a firm that’s rejecting AI,” Greg shared. “Understanding AI will make their careers viable in the future, and maybe without it you can’t keep up with the industry.” 

Takeaway 4: Advisors can use AI to get time back in their day

Every client meeting comes with a laundry list of administrative tasks, like taking notes during the meeting, writing up a summary, completing follow-up items, and updating the financial plan accordingly. For many advisors, all this tedium eats into what actually matters—focusing on the client’s wants and needs. 

AI has the power to alleviate many of these administrative burdens while allowing an advisor to maintain the human touch they bring to their client relationships. 

“We can create this virtuous cycle where, with AI-assisted note-taking, you’re capturing way more data in the meetings themselves and you can focus on the conversation rather than worrying about writing down all the specifics,” Parker Ence said. “When you can be 100% present with a client during the meeting, they feel better about the whole situation.” 

Additionally, as humans we’re all prone to procrastination. If, as an advisor, you find yourself putting off the time-consuming follow-up tasks that come out of a meeting, AI can be a solution. 

“We hear advisors say they dread doing the post-meeting debrief,” Parker went on. “Because AI is able to give that initial 95% completed draft of the meeting and queue all the tasks to push into the CRM, the advisor saves time and does a better job.” 

Finally, an AI assistant can help an advisor prep for client meetings by looking through previous notes and surfacing the relevant information. 

“That AI assistant can go back through the notes from the past seven or eight meetings and create a briefing on what the client has said is most important to them, concerns they’ve brought up, and what was discussed in the last meeting,” Parker said. “So the first five minutes of that meeting becomes incredible because the advisor has a firm grasp on the goals and even remembers to ask about the new puppy.” 

Grow your business with AI

Incorporating AI at your firm may seem like a daunting task—but finding the small ways it can lighten your load day to day can result in significant business impact. 

As Greg Matusky noted from his firm’s study, when used thoughtfully, AI can improve both client and employee retention—learnings he’s applying at his own firm. 

Like our panelists, it’s important for savvy firms to understand AI’s potential and find accessible ways to begin using it to streamline daily processes, reduce the administrative burden, and free up time to focus on clients and their needs.

To learn more about how Vanilla can help you level up your firm’s estate planning offerings, schedule a demo today.