Wealth Firms Cozying to AI as Time Saved on Tasks Spurs Growth
Emerging artificial intelligence tools are simplifying portfolio construction and management and helping accelerate client growth.
Artificial intelligence tools increasingly adopted by wealth management firms promise advisors greater efficiency and time saved to focus on client-facing tasks, the technology's boosters say.
Larger firms, like Morgan Stanley, Merrill Lynch and LPL Financial, which have experimented with applying AI to common tasks to increase the productivity of their thousands of advisors, are among the first adopters. Executives have touted minutes and hours shaved off of administrative tasks they claim have led to more inbound client business.
Independent registered investment advisors, meanwhile, feel largely unprepared to integrate AI into their own businesses, according to a survey conducted by Charles Schwab and released last month. More than 80% of 1,088 advisors surveyed believe more needs to be done to fully take advantage of AI, and 60% think AI is the tech-related industry factor they're least prepared to navigate, Schwab said it found.
When considering AI implementation, most firms are looking for outcomes of growth, cost reduction and risk reduction, according to Rob Pettman, chief revenue officer and president at Tifin, a provider of AI tools for wealth firms. Pettman, who previously led LPL's wealth management solutions team, joined Tifin earlier this year.
Portfolio construction and management is one area where AI is being applied in advisors' workflow, including via Tifin, Pettman noted. This can involve using information that reflects the market outlook of an advisor's home firm or firm of choice, and external opinions combined with analytics engines and tools to monitor which client accounts are impacted, and then calling up possible changes an advisor might make based on that outlook, according to Pettman.
Turnkey asset management platform AssetMark last month said it's incorporating Tifin's AI capabilities into its investment consulting services through an expanded collaboration with Tifin Sage. These tools allow AssetMark's investment consultants to "rapidly" gather insights, align advisory firm inputs and deliver tailored model portfolios efficiently, the company said in a Thursday announcement.
AssetMark worked with more than 9,000 financial advisors and had more than $127 billion in assets on its platform as of Sept. 30, the firm said.
Tifin also has AI capabilities that help advisors win new clients, expand their relationship with existing clients and stem attrition, Pettman said. Insights provided to advisors can also identify current clients who might be receptive to more "exploratory" conversations, which he said has led to one in four such calls made resulting in more assets coming over.
At Savvy Wealth, an advisor platform startup with an affiliated registered investment advisory firm, tasks like new account onboarding, portfolio recommendations and personalized communications are handled through its AI-powered platform, according to Savvy founder and Chief Executive Officer Ritik Malhotra. The company in August announced it had secured $15.5 million in new funding, in part to further develop its AI technology.
Savvy also handles investment management solutions, with the ability to perform portfolio allocation, rebalancing and other capabilities using various models and customizations of an advisor's choice, Malhotra said.
Savvy's internal marketing capabilities use AI and other software to speed the process of understanding an advisor's unique value propositions, their client base and where opportunities for new clients might be, according to Malhotra. He added that Savvy can reduce the time it takes to develop that content for advisors by 80%.
The time saved through these solutions also allows advisors to spend more time on client-facing tasks like prospecting and working with current clients to create updated financial plans, according to Malhotra.
The Schwab study, fielded in June, found that 54% of advisors believe that implementation of AI will be the main factor affecting industry growth over the next three years, beating out regulatory changes, mergers and acquisitions activity, and availability of talent.
Contact the reporter: Mela.Seyoum@FT.com
Purchase a reprint: click here or (212) 542-1265
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.
Wealth Firms Cozying to AI as Time Saved on Tasks Spurs Growth
Emerging artificial intelligence tools are simplifying portfolio construction and management and helping accelerate client growth.
Artificial intelligence tools increasingly adopted by wealth management firms promise advisors greater efficiency and time saved to focus on client-facing tasks, the technology's boosters say.
Larger firms, like Morgan Stanley, Merrill Lynch and LPL Financial, which have experimented with applying AI to common tasks to increase the productivity of their thousands of advisors, are among the first adopters. Executives have touted minutes and hours shaved off of administrative tasks they claim have led to more inbound client business.
Independent registered investment advisors, meanwhile, feel largely unprepared to integrate AI into their own businesses, according to a survey conducted by Charles Schwab and released last month. More than 80% of 1,088 advisors surveyed believe more needs to be done to fully take advantage of AI, and 60% think AI is the tech-related industry factor they're least prepared to navigate, Schwab said it found.
When considering AI implementation, most firms are looking for outcomes of growth, cost reduction and risk reduction, according to Rob Pettman, chief revenue officer and president at Tifin, a provider of AI tools for wealth firms. Pettman, who previously led LPL's wealth management solutions team, joined Tifin earlier this year.
Portfolio construction and management is one area where AI is being applied in advisors' workflow, including via Tifin, Pettman noted. This can involve using information that reflects the market outlook of an advisor's home firm or firm of choice, and external opinions combined with analytics engines and tools to monitor which client accounts are impacted, and then calling up possible changes an advisor might make based on that outlook, according to Pettman.
Turnkey asset management platform AssetMark last month said it's incorporating Tifin's AI capabilities into its investment consulting services through an expanded collaboration with Tifin Sage. These tools allow AssetMark's investment consultants to "rapidly" gather insights, align advisory firm inputs and deliver tailored model portfolios efficiently, the company said in a Thursday announcement.
AssetMark worked with more than 9,000 financial advisors and had more than $127 billion in assets on its platform as of Sept. 30, the firm said.
Tifin also has AI capabilities that help advisors win new clients, expand their relationship with existing clients and stem attrition, Pettman said. Insights provided to advisors can also identify current clients who might be receptive to more "exploratory" conversations, which he said has led to one in four such calls made resulting in more assets coming over.
At Savvy Wealth, an advisor platform startup with an affiliated registered investment advisory firm, tasks like new account onboarding, portfolio recommendations and personalized communications are handled through its AI-powered platform, according to Savvy founder and Chief Executive Officer Ritik Malhotra. The company in August announced it had secured $15.5 million in new funding, in part to further develop its AI technology.
Savvy also handles investment management solutions, with the ability to perform portfolio allocation, rebalancing and other capabilities using various models and customizations of an advisor's choice, Malhotra said.
Savvy's internal marketing capabilities use AI and other software to speed the process of understanding an advisor's unique value propositions, their client base and where opportunities for new clients might be, according to Malhotra. He added that Savvy can reduce the time it takes to develop that content for advisors by 80%.
The time saved through these solutions also allows advisors to spend more time on client-facing tasks like prospecting and working with current clients to create updated financial plans, according to Malhotra.
The Schwab study, fielded in June, found that 54% of advisors believe that implementation of AI will be the main factor affecting industry growth over the next three years, beating out regulatory changes, mergers and acquisitions activity, and availability of talent.
Contact the reporter: Mela.Seyoum@FT.com
Purchase a reprint: click here or (212) 542-1265
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.
