Revolutionizing wealth tech: insights from industry leaders

From generative AI to hyper-personalization and ethical pitfalls, wealth tech experts share their perspectives in wide-ranging discussion

Revolutionizing wealth tech: insights from industry leaders

Canada’s wealth tech sector is at a crossroads, driven by an unprecedented wave of technological advancements and shifting client expectations.

Apart from the continuing trend of hyper-personalization and focus on advisor-client relationships, the emergence of generative AI like ChatGPT is breaking new ground for firms to innovate and elevate their services.

So what’s the state of wealth technology today, and what’s in store for the future?

That’s what two industry experts discussed in a recent Wealth Professional AdvisorConnect session titled “From high-tech to high-touch: unlocking digital opportunities to boost client-advisor relationships.”

Artificial intelligence: hopes and fears

“There's little doubt that generative AI will really revolutionize the industry,” said David Breakstone, managing director, Global Wealth and Asset Management Industry Consulting at Salesforce. “I think the initial use cases are around driving advisor productivity [and] improving customer interactions.”

He said AI could potentially be leveraged by an advisor to draft a letter to a client, written in the tone that client would like to be addressed in. Another potential application would be a bot designed to listen in on meetings, write minutes, and assign action items to attendees.

“What I'm really interested in seeing is how generative AI will support the advisor in portfolio construction,” he added. “If done well, it's going to be a great tool; if done poorly, it will be a glorified robo advisor.”

Jonathan Georges, Asset Management and Wealth Management Solutions Lead at Equisoft, said most conversations around AI nowadays revolve around two diametrically opposed views. “At one end, you've got those that feel that AI is going to lead to the extinction of the human race,” he said. “On the other extreme, you have those that feel that this is just another passing fad that's going to come and go in our industry.”

The truth, he said, lies somewhere in between. Citing survey research from Morgan Stanley, he said 72% of respondents viewed AI as a game changer, but 82% believed it would never replace humans.

“That popular saying … ‘AI isn't going to take your job, someone leveraging AI is going to’ … I think that definitely rings true in this case,” he said.

Clients, advisors at the heart of transformation

Asked about the future of wealth technology, Georges predicted hyper-personalization will continue to be a driving theme. By leveraging large troves of customer data and artificial intelligence, he said advisors will have an unprecedented opportunity to know their clients better and provide an enhanced client experience.

One still-niche area with great potential, he said, comes from social media listening. By integrating that function with their CRM and identifying topics of interest to the niches they serve, advisors increase their ability to treat clients as a “market of one” while still delivering personalization at scale.

“I think [hyper-personalization] is going to have wide-ranging implications on the whole client life cycle, ranging from how advisors are going to be prospecting for clients, how advisors are going to be marketing to clients, onboarding new clients, delivery of investment solutions, and even the investment solutions themselves,” Georges said.

From where Breakstone sits, every wealth firm is on a journey to rapidly evolve their operations, with an intense focus on putting advisors at the centre of everything they do. That includes creating a unified desktop experience, with a connected ecosystem of best-in-class platforms for financial planning, trading and custody, and CRM, among other functions. The ultimate goal: to modernize the advisor experience so they can do what they do best.

“How do we drive productivity? How do we use technology to drive productivity, so that it frees up the advisor’s time to engage with their clients?” he said. “Building that streamlined workflow and ecosystem is top of mind for the industry.”

The road to tech adoption: pitfalls and warning signs

While the journey of technological adoption represents a seismic opportunity for wealth firms, both Georges and Breakstone stressed the need for caution.

With respect to artificial intelligence, Georges said firms should be mindful of the potential for human biases like gender bias, racial prejudice, and age discrimination to be incorporated into the models. Those biases, he said, should be removed from the equation as the world moves forward with the nascent technology.

“We have to consider all things around data privacy … There's the whole aspect of transparency when it comes to the technology,” he added.  “I think going forward, [advisors are going to have] conversations with clients about the use of their data … and communicating that at the end of the day, it’s all in an effort to improve their experience.”

Breakstone also stressed that contrary to popular belief, digital transformation is less about technology and more about people. In other words, any firm looking to implement enterprise-wide changes should take steps to engage the stakeholders who’ll be using them.

“Where firms go wrong – and it always blows my mind – is that they don't talk to the people that are going to use the technology before they start the project,” he said. “Nothing's worse than just launching something out there, and no one's going to use it … It takes a little extra effort, but you will definitely have a better solution.”

To view the full recording of the discussion, please click here.