How AI is Unlocking Personalization at Scale in Wealth Management

Published on
October 22, 2024
Contributors
Cameron Howe
CEO
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Personalization is no longer optional in wealth management—it’s expected. Clients demand tailored advice and strategies that reflect their specific goals, risk tolerance, and values. But providing personalized service to each client—especially at scale—has been a long-standing challenge for wealth managers.

Artificial intelligence (AI) is transforming this process. With AI-driven financial advice, wealth managers can deliver personalized services that meet every client’s needs without significantly increasing their workload. In fact, 70% of wealth management clients say personalized service is key to their advisor relationships.

This post will explore how AI is enabling personalization at scale, allowing wealth managers to deepen client relationships while delivering advice more efficiently.

Why Personalization is the Future of Wealth Management

For years, wealth managers have focused primarily on high-net-worth (HNW) clients, offering bespoke investment strategies and advice. But today, all investors—whether HNW, mass affluent, or even new to investing—expect a more personalized wealth management approach.

Clients no longer accept one-size-fits-all strategies. They want advice aligned with their financial goals, risk tolerance, and personal values. This shift is evident as 71% of clients are willing to share personal data for more customized services.

Historically, providing such personalized services to every client required time-consuming, manual portfolio assessments and frequent adjustments. But AI is now enabling personalized advice at scale, allowing wealth managers to serve a broader range of clients without increasing the administrative burden.

Graph showing that seventy percent of clients in wealth management say personalization is a key factor in selecting an advisor

How AI Automates Personalized Wealth Management

AI is a powerful tool for analyzing large amounts of client data quickly, which makes it perfect for scalable wealth management solutions. By processing financial goals, risk tolerance, and behavioral data, AI delivers tailored recommendations for each client.

Here’s how AI-driven wealth management enables personalization at scale:

1. AI Understands Each Client’s Goals and Preferences

AI tools can analyze client data and create detailed profiles that include:

  • Financial goals: Saving for retirement, purchasing a home, or funding education.
  • Risk tolerance: The level of financial risk a client is comfortable with.
  • Personal values: Whether the client prefers sustainable investing (e.g., ESG funds).

With this information, AI automatically recommends investment options that align with the client’s preferences.

Example: If a client prefers environmentally conscious investing, AI highlights ESG funds. If the client has a low-risk tolerance, AI suggests stable, low-risk investments.

This happens automatically, removing the need for wealth managers to manually research each option.

2. AI Enables Real-Time Portfolio Adjustments

Market conditions and client preferences change over time. AI allows wealth managers to adjust portfolios in real time, keeping investments aligned with client goals.

For instance:

  • If the market becomes volatile, AI can reduce exposure to high-risk assets for clients with low risk tolerance.
  • As a client approaches retirement, AI can recommend shifting to more conservative investments.
  • AI tracks client behavior and real-time data to automatically update portfolios.

By making these real-time adjustments, AI ensures that portfolios stay aligned with clients’ evolving needs, without requiring constant manual intervention from wealth managers.

3. AI Personalizes Communication and Financial Advice

Personalization isn’t limited to investments. AI helps wealth managers tailor communication and advice to match each client’s needs.

How AI Enhances Communication:

  • Tailored advice: AI can analyze past client interactions to predict which advice or recommendations are most relevant, assisting with Next Best Action.
  • Timely updates: AI sends personalized updates if market conditions change or a client’s portfolio requires attention.
  • Behavior tracking: AI monitors how clients interact with digital tools (like client portals), allowing wealth managers to adapt communication styles to match client preferences.

By delivering personalized communication, wealth managers can build stronger relationships with their clients.

AI helps wealth managers deliver more personalized service to their clients

The Human Touch: AI Empowers Advisors to Build Deeper Relationships

While AI handles data analysis and portfolio adjustments, it doesn’t replace the human element in wealth management. Instead, AI frees advisors from routine tasks, allowing them to focus on building deeper relationships.

AI allows wealth managers to:

  • Understand clients’ emotions and life goals: Personal conversations go beyond numbers, and AI helps advisors gather insights to make these conversations more meaningful.
  • Offer strategic, high-level advice: AI manages the day-to-day portfolio decisions, giving wealth managers more time to offer big-picture, strategic advice.
  • Respond in real-time: AI triggers alerts when a client’s financial situation changes, enabling wealth managers to step in and provide timely guidance.

By automating routine tasks, AI allows wealth managers to focus on what matters most—building trust and delivering personalized advice that resonates with clients.

Achieving True Personalization at Scale with AI

Offering personalized advice to every client without increasing the workload is a game-changer in wealth management. Firms that adopt AI-driven personalization will be better equipped to meet client expectations and grow in a competitive market.

Here’s why personalized wealth management at scale is crucial for the future of wealth management:

  • Stronger client relationships: Personalization makes clients feel understood and valued, improving retention.
  • More efficient service: AI handles the manual work, enabling wealth managers to scale without compromising on service quality.
  • Increased client satisfaction: Clients receive advice tailored to their unique goals and values, improving overall satisfaction.

Wealth managers who adopt AI can deliver the personalized, timely advice clients now expect, whether serving high-net-worth individuals or a growing base of mass affluent clients.

Building Personalization at Scale

Want to see how AI-driven wealth management solutions can help you deliver personalized services to all your clients? Book a demo to learn how Investipal enables wealth managers to offer personalized advice at scale—without increasing workload.

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