Are ‘Solopreneur’ Wealth Managers Ready for Their AI Moment?
The continuing adoption of artificial intelligence throughout the financial-services industry now seems as inevitable as death and taxes—with one notable exception.
In mobile banking, trading, asset management, and investment advisory services, AI tools are being used to support or guide investment research, implement strategy shifts, and send money among accounts. Yet one segment of our industry remains almost entirely operated by humans: wealth management. Financial advisors handle nearly all aspects of their business, whether it involves working with clients to devise wealth management plans, moving resources into more secure/lucrative/risk-heavy destinations depending on goals, marketing their own services, meeting with prospective clients, or submitting their compliance reports on time.
Such time-intensive efforts disproportionately affect the increasing number of wealth managers departing big firms for solo entrepreneurial pursuits or smaller shop. For such “solopreneurs,” AI can step in where a full- or part-time salaried human counterpart used to be the only option, actively taking on administrative and operational workflows so advisors can dedicate more time sitting face to face with their clients. Deploying AI for daily and critical functions like payroll, administration, and database management can save solo practitioners and small shops money, time, and bandwidth. AI-enabled workflow automation can also reduce the risk of compliance issues and customer-facing inaccuracies or discrepancies.
Challenges ahead. Still, hurdles remain. The ability of human practitioners to embrace change is one challenge, but one that financial advisors—including seasoned experts with decades of wealth management experience—appear up for. According to a Fidelity report, one in six wealth advisors switched firms between 2019 and 2023, with many opting to go independent. And when it comes to artificial intelligence, an Accenture study found that the vast majority—87%—of advisors surveyed were willing to invest time in learning about and adopting AI tools if they saw a clear benefit in doing so.
On the tech side, however, regulatory, compliance, and adoption roadblocks remain in the path of AI adoption in wealth management. We are just beginning to understand how helpful and practical AI is for financial advisors in the context of our highly regulated industry. But there are now areas of opportunity to incorporate AI in wealth management in ways that overlap with areas at the greatest risk of costly human error.
For example, if a wealth manager taking on a new client mistakenly adds a single extra space when inputting a client’s name in an ACATS transfer, it could lead to the custodial bank partner rejecting every part of the paperwork, making the advisor start again from scratch. While it might seem like a minor issue, advisor redos and resubmissions often take weeks, directly affecting their ability to work for clients and collect revenue for their services. The result: significant time spent and wasted due to a very human mistake.
Another example: Due to SEC and Finra compliance rules, every piece of communication with a prospect or a client must be archived. This extends to phone, email, LinkedIn, social media, and other digital platforms. AI has the ability to capture all client communications across channels, including meeting notes that can be sent to a client post meeting with a recap of what was discussed. This is a strong use case that prevents the human error of forgetting to archive a conversation. To combat this real problem with regulatory implications, Morgan Stanley has deployed an AI assistant named Debrief to support advisors and junior staff with automated workflows by accurately capturing what is said during meetings and proposing draft correspondences for advisors to review before sending.
At the center of why this is valuable: One oversight or mistake can derail a client-advisor relationship, land an advisor in trouble with regulators, and reduce revenue. The need to find such solutions—and the risk inherent in not finding them—depends on the size and staffing of a wealth management firm. Large firms with the resources to fully staff teams dedicated to specific areas of concern have the advantage here, while solo entrepreneurs and small shops are at greater risk and under more pressure to win and keep business while adhering to regulations and compliance.
But in wealth management, as in other people-centric industries from insurance to healthcare, there’s a movement to provide solutions to advisors who opt for a more independent, entrepreneurial, and resource-strapped path. The introduction of AI and other back office-focused technology built to support administrative to-do lists in a compliant and trustworthy manner offers these enterprising advisors an path to winning business and collecting revenue at sustainable levels.
Ultimately, embracing the workflow automation side of AI can help financial advisors retain the industry’s humanity while helping clients sustain and grow their wealth. It’s a win-win.
Meet
Ritik Malhotra
Ritik is Founder & CEO at Savvy Wealth. When trying to find a financial advisor that offered a tech-forward, modern experience after selling two startups in his 20s, Ritik was compelled to found Savvy when he was unable to find what he was looking for. Since then, Ritik has built an AI-driven technology platform and $700M+ AUM firm that not only simplifies advisors' day to day, but also reduces friction in client engagement.
Are ‘Solopreneur’ Wealth Managers Ready for Their AI Moment?
The continuing adoption of artificial intelligence throughout the financial-services industry now seems as inevitable as death and taxes—with one notable exception.
In mobile banking, trading, asset management, and investment advisory services, AI tools are being used to support or guide investment research, implement strategy shifts, and send money among accounts. Yet one segment of our industry remains almost entirely operated by humans: wealth management. Financial advisors handle nearly all aspects of their business, whether it involves working with clients to devise wealth management plans, moving resources into more secure/lucrative/risk-heavy destinations depending on goals, marketing their own services, meeting with prospective clients, or submitting their compliance reports on time.
Such time-intensive efforts disproportionately affect the increasing number of wealth managers departing big firms for solo entrepreneurial pursuits or smaller shop. For such “solopreneurs,” AI can step in where a full- or part-time salaried human counterpart used to be the only option, actively taking on administrative and operational workflows so advisors can dedicate more time sitting face to face with their clients. Deploying AI for daily and critical functions like payroll, administration, and database management can save solo practitioners and small shops money, time, and bandwidth. AI-enabled workflow automation can also reduce the risk of compliance issues and customer-facing inaccuracies or discrepancies.
Challenges ahead. Still, hurdles remain. The ability of human practitioners to embrace change is one challenge, but one that financial advisors—including seasoned experts with decades of wealth management experience—appear up for. According to a Fidelity report, one in six wealth advisors switched firms between 2019 and 2023, with many opting to go independent. And when it comes to artificial intelligence, an Accenture study found that the vast majority—87%—of advisors surveyed were willing to invest time in learning about and adopting AI tools if they saw a clear benefit in doing so.
On the tech side, however, regulatory, compliance, and adoption roadblocks remain in the path of AI adoption in wealth management. We are just beginning to understand how helpful and practical AI is for financial advisors in the context of our highly regulated industry. But there are now areas of opportunity to incorporate AI in wealth management in ways that overlap with areas at the greatest risk of costly human error.
For example, if a wealth manager taking on a new client mistakenly adds a single extra space when inputting a client’s name in an ACATS transfer, it could lead to the custodial bank partner rejecting every part of the paperwork, making the advisor start again from scratch. While it might seem like a minor issue, advisor redos and resubmissions often take weeks, directly affecting their ability to work for clients and collect revenue for their services. The result: significant time spent and wasted due to a very human mistake.
Another example: Due to SEC and Finra compliance rules, every piece of communication with a prospect or a client must be archived. This extends to phone, email, LinkedIn, social media, and other digital platforms. AI has the ability to capture all client communications across channels, including meeting notes that can be sent to a client post meeting with a recap of what was discussed. This is a strong use case that prevents the human error of forgetting to archive a conversation. To combat this real problem with regulatory implications, Morgan Stanley has deployed an AI assistant named Debrief to support advisors and junior staff with automated workflows by accurately capturing what is said during meetings and proposing draft correspondences for advisors to review before sending.
At the center of why this is valuable: One oversight or mistake can derail a client-advisor relationship, land an advisor in trouble with regulators, and reduce revenue. The need to find such solutions—and the risk inherent in not finding them—depends on the size and staffing of a wealth management firm. Large firms with the resources to fully staff teams dedicated to specific areas of concern have the advantage here, while solo entrepreneurs and small shops are at greater risk and under more pressure to win and keep business while adhering to regulations and compliance.
But in wealth management, as in other people-centric industries from insurance to healthcare, there’s a movement to provide solutions to advisors who opt for a more independent, entrepreneurial, and resource-strapped path. The introduction of AI and other back office-focused technology built to support administrative to-do lists in a compliant and trustworthy manner offers these enterprising advisors an path to winning business and collecting revenue at sustainable levels.
Ultimately, embracing the workflow automation side of AI can help financial advisors retain the industry’s humanity while helping clients sustain and grow their wealth. It’s a win-win.
Meet
Ritik Malhotra
Ritik is Founder & CEO at Savvy Wealth. When trying to find a financial advisor that offered a tech-forward, modern experience after selling two startups in his 20s, Ritik was compelled to found Savvy when he was unable to find what he was looking for. Since then, Ritik has built an AI-driven technology platform and $700M+ AUM firm that not only simplifies advisors' day to day, but also reduces friction in client engagement.
