Editor’s note: Mallon FitzPatrick is a longtime columnist with Rethinking65. To read more of his articles, click here.
Mallon FitzPatrick
AI is everywhere.
It seems we can hardly turn on our phones without being inundated with industry experts predicting how artificial intelligence will revolutionize the wealth management experience for clients and advisors alike.
The good news is, it’s not all just hype or futuristic predictions. Practical, actionable AI tools are already available that advisors should be using today to build their businesses.
To avoid advertising our specific tools, we’ll focus on their functions and benefits for our planning team, wealth managers and clients. We use three AI services daily to evaluate estate plans, extract and organize data from documents for research, organize original content, help wordsmith and style our content to resonate with specific client segments, and determine the likely mood of a client on any given day. If you’d like to know about the specific tools, feel free to reach out to me.
While AI will never replace the need for human advisors to engage with their clients on a human level, there are a multitude of routine tasks that AI can mercifully take off our plates. AI can help advisors address long-identified issues related to communicating with clients, financial planning, and investments.
If used strategically, AI can enable wealth managers to enhance and increase services, improve efficiency, and deliver an improved client experience.
Advisors who adopt AI may be able to facilitate smoother client interactions, conduct deeper and faster research, and offer some time-demanding services they previously shied away from with some or all clients due to poor return on investment. For example, advisors can use AI to evaluate and communicate with their clients about their estate plans more easily. AI can also enable advisors to more rapidly create original content to share with clients.
I’m already seeing some measurable differences from my adoption of AI, which I’ll explain in a bit.
A Deeper Dive
Before looking at where AI can deliver the greatest impact, we should define what it is — and what it isn’t.
When we think of AI, most of us probably envision machine learning or a program that thinks for itself. In this article, I’m referring to generative AI — a deep-learning model that can generate high-quality text, images, and other content based on the data on which it is trained.
A word of caution here: Using AI requires the wealth manager or planner to have a high level of competency in the subject matter. That’s because AI results can sometimes be inaccurate. To avoid using inaccurate information, we add quality checks to many of our AI processes.
A few wealth management firms already use AI in some capacity, but that capacity is too often limited and only scratches the surface of what AI can do today. For example, firms may implement AI for basic data tasks such as automatic note-taking and limited organization.
Here are three specific ways AI can be used to deliver a big impact:
Improve Marketing and Research
AI can expedite market research and enhance original content. For example, it can evaluate dozens of primary source documents, such as legislation and white papers, in a matter of seconds instead of the hours it takes advisors to conduct comprehensive research. That gives advisors extra time to connect with clients and prospective clients.
Advisors can also use AI to cross-reference research with the current legislative landscape, economic environment, and market conditions. This enables them to provide clients with informed, relevant insights. After the research is complete and an initial piece of content is created, advisors can further leverage AI to define the style of the piece and improve communication with the target audience. Would you like the communication to be more conversational with less wonky jargon? Just ask ChatGPT or another AI tool.
By analyzing engagement metrics and feedback, AI can help advisors further tailor future messaging to better resonate with specific client personas or niches, enhancing the impact of their marketing efforts.
Streamline Estate Planning and Evaluation of Legal Documents
AI can significantly reduce a wealth planner’s time reviewing and summarizing key documents, such as wills, powers of attorney, healthcare proxies, and revocable and irrevocable trusts. As someone who has spent time pouring through estate planning documents, I’m appreciative of this enormous time savings. It enables advisors to go into greater depth in areas where they can add the most value to clients.
For example, AI software creates engaging estate water flow charts, which help clients understand the full financial picture and the potential outcomes of their estate planning.
Furthermore, advisors can use AI to convert the “legalese” in LLC operating agreements, partnership agreements, prenups, and other legal documents into a language the average client understands. Ensuring clients fully understand these important documents is not only the right thing to do, but it also deepens the client relationship and offers a “refreshing” differentiator for you and your firm.
Behavior assessment tools can be extremely helpful in helping advisors understand how to communicate with individual clients effectively. After collecting behavior data with a client survey, AI generates actionable insights.
For example, a “market mood” indicator allows wealth managers to quickly view a list of their clients and understand how they feel at any given moment. This presents opportunities for proactive and highly personalized outreach. The indicator cross-references multiple days of market performance with a client’s known behavior traits and biases. Advisors can then quickly reach out to the client before concerns escalate, which provides a better overall experience and strengthens the relationship.
Certain AI tools further personalize communication by offering real-time alerts about market events or life changes that may impact a client’s financial situation.
While the analytical and behavioral aspects of wealth are equally important and complex, the behavioral side drives decision-making. Understanding and educating clients about their own behavioral biases can prevent them from making poor decisions and increase the likelihood that they experience good outcomes. According to The Capgemini Research Institute’s World Wealth Report 2024, 79% of high-net-worth clients want guidance from relationship managers to help them manage their unknown biases. With AI tools that analyze vast amounts of data — including transaction history, social media activity, and communication patterns — advisors can identify client biases and provide tailored advice.
Bear in Mind
It’s important to balance technically optimal solutions and what clients will accept. The further a solution is from the client’s preference, the more time it takes, and the more difficult it can be, to change the client’s thinking. Wealth managers who understand a client’s behavior and tendencies will have an easier time meeting their expectations.
AI systems can track and analyze clients’ behaviors in real time, adjusting strategies as needed. For instance, software can detect changes in a client’s risk tolerance or market engagement, allowing wealth managers to proactively address concerns and adjust portfolios accordingly. This dynamic approach can help create a more responsive and personalized client experience.
I have already been able to measure differences in my practice, such as reducing original content production time by 50%, which saves us 25-30 hours a month; decreasing the average time to evaluate an estate plan from 6 hrs to 30mins, a 90% increase in efficiency; and more.
The overall time savings and scalability that AI has afforded the planning teams is best demonstrated by the increase in the average number of plans completed each month. From 2023, the number of monthly plans completed rose by 55%, without increasing headcount.
While the adoption of AI in wealth management is happening here and now, it is set to increase significantly in the years to come. AI can significantly improve client relationships and retention by assessing client behavioral biases, optimizing investment strategies, enhancing communication, streamlining estate planning, and helping advisors recognize biases.
A structured approach to integrating AI, focusing on scalable adoption, can ensure meaningful outcomes aligned with business goals. As wealth management firms continue to integrate AI into their operations, the focus should remain on delivering personalized, insightful, and responsive services that meet clients’ evolving needs. Embracing AI not only ensures competitiveness in a digital landscape but also fosters deeper, more meaningful client relationships.
Mallon FitzPatrick, CFP, is a principal and managing director at Robertson Stephens and heads the firm’s financial planning center. For more information about Mallon or Robertson Stephens, please visit www.rscapital.com or email info@rscapital.com. Advisory services are offered through Robertson Stephens Wealth Management LLC. Opinions presented are those of the author and not necessarily Robertson Stephens.Please read important disclosures.
