I attended Finovate’s first-ever wealth management track last week. Several themes emerged during my time spent there:
“There is an AI for that.”
Walking the conference halls, it was impossible not to hear how AI is going to drive better digital experiences and outcomes for investors and financial advisors.
TIFIN AG demonstrated an AI solution that analyzes data and identifies trends based on client behaviors. Its AI-driven insights give advisors more ‘intelligence’ to thoughtfully grow market share with existing clients and help them prioritize the prospects most likely to convert. Recognizing that wealth management’s growth engines are new customer acquisition, retention of existing customers, and AUM growth, TIFIN AG is showing “there is an AI for that” when it comes to optimizing advisor effectiveness.
Wealth management firms must still balance the innovation AI offers with the oversight and governance expected from regulators. As AI continues make inroads in wealth management, it’s important for firms to use explainable AI tools that provide trust, transparency, and explainability to “black box” AI systems.
The Great Wealth Transfer Is Happening
A panel focused on the impact of the Great Wealth Transfer highlighted how wealth managers are adapting to attract and retain a rapidly changing investor demographic. Validators are now the largest investor segment in the US (42%). US validators are young (average age of 43), they have high incomes (average of $106,000), and 74% of them are employed – and they’re more likely than other segments to have conducted investment activities through mobile channels.
So, while validators prefer to check their investments in the mobile channel and are “hands on” with financial planning tools, they also like in-person and voice communications with their financial advisors. Wealth management firms are currently driving loyalty by offering easy-to-use digital channels and the comfort of connecting with an advisor where, when, and how the customer wants to meet.
Firms that develop capabilities (digital + human) that create an optimal hybrid experience are set up well to attract, retain, and successfully serve the next generation of investors during the Great Wealth Transfer.
Improving The Probate Experience
WealthTech firm illuminote stood out with a digital solution to verify the legitimacy of paper-based legal documents like trusts, powers of attorney, and wills. The firm offers a digital registry that authenticates and registers records, provides transparency, and streamlines the probate process. By protecting the final wishes of family members, this differentiated solution appeals to a select group of customers who want an easier end-of-life planning process. In a legal industry ripe for innovation, standardizing digital records for all parties is a first step to improve the probate experience.
Attracting The Masses To The Stock Market
One of our predictions for 2024 was that new entrants will speed to market through wealth management as a service (WMaaS). At Finovate, Eko Investments showed how making investing accessible to the mass market is possible. The platform offers a white-label investment solution to banks, credit unions and FinTechs. Standing up a wealth management solution is onerous. This solution offers a rapid way for FIs to offer investment solutions while enabling customers to invest with as little as $10. Turnkey solutions like Eko offer a straightforward way for smaller FIs to expand their product suite quickly.
There were many more topics at Finovate. Clients interested in discussing these and other themes can chat with me via inquiry or guidance session. And I look forward to an even bigger wealth management track next year at Finovate!
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