In a report released by the LSEG titled “The Future of Wealth: Why Consistency Matters,” the transformative role of AI in wealth management is extensively discussed.
The study, drawing on a global survey of 2,000 investors and insights from 250 senior executives across wealth management firms, sheds light on the evolving expectations and operational shifts within the industry.
The report highlights that a significant 62% of wealth management firms believe AI will drastically alter their operational landscape, aligning with the expectations of 68% of investors who demand digital experiences on par with top tech companies. AI’s potential in enhancing automation, reducing manual errors, and cutting costs while providing constant connectivity and ease of use is particularly appealing to investors.
Despite the technological strides, the value of human advisors remains irreplaceable, with the report suggesting a move towards a hybrid advisory model where human expertise complements AI tools. This model supports advisors in various capacities, including portfolio management, where over 90% of investors see AI playing a role. Furthermore, about 45% of current advisor users and 51% of non-users see the primary value of advisors in offering trusted investment advice over the next three years.
The study also identifies critical areas for wealth management firms to focus on, such as delivering omnichannel experiences and addressing knowledge gaps in sustainable investing. Notably, the research indicates a considerable interest among millennials and Baby Boomers in a wealth manager’s digital prowess when selecting a provider.
Cost-effectiveness emerges as another significant trend, with 64% of investors seeking more affordable financial solutions. Despite this, over half are willing to pay a premium for sound financial advice during uncertain times, highlighting the enduring value of expert guidance.
Coinciding with the report’s release, LSEG has introduced the Wealth Advisor Dashboard on its Workspace platform. This tool is part of LSEG’s efforts to equip wealth advisors with advanced tools for capitalising on emerging wealth trends, providing consistent, data-driven insights to enhance client interactions.
LSEG’s Head of Wealth Solutions, Sune Mortensen, commented on the findings: “In the competitive wealth management industry, we understand the immense pressure that wealth firms and advisors face in attracting, engaging, and retaining their clients. The prevalence of AI and other technological advancements are also making wealth managers rethink their business strategy and client engagement models. There is a growing need to demonstrate value as well as effectively manage increasing trading volumes.”
This comprehensive report serves as a critical resource for those within the financial sector, aiming to align their strategies with the fast-evolving landscape of wealth management.
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