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The wealth industry could be headed into an era of accelerated innovation, as advisory firms shift from zero to full speed ahead with artificial intelligence.
Like many firms across the financial services industry, wealth managers have been slow to adopt AI. Concerns about security, regulatory compliance and basic accuracy have prompted most established financial service providers to take a wait-and-see approach.
For years, wealth managers have been reluctant to fully embrace AI. It was only about 15 years ago that the arrival of robo-advisors raised widespread fears that human advisors would soon become relics of the past. Although those fears proved entirely unfounded, the same worries are probably keeping some wealth management firms and individual advisors from going all-in on AI.
Even as AI has become more advanced, many advisors remain hesitant, particularly those who are less comfortable with technology. But the conversation has shifted. The focus is no longer on whether AI will be used in wealth management, but how firms will strategically deploy it to enhance advisor productivity, elevate the client experience, and drive business growth.
An epic innovation boom
While advisors have been slow to adopt AI, there has been an epic innovation boom in the technology. Since the initial debut of ChatGPT-3.5 in 2022, a rapid succession of new models from OpenAI and others have brought incredible advances. AI applications have become faster, more accurate and timelier. They can analyze text, images, audio and video. Generative AI applications are creating new content across all those media.
Most importantly, AI is getting better at thinking. The latest AI models are capable of reasoning, or working through complex problems to arrive at answers.
Of course, advisors haven’t completely ignored these advances. Like professionals in all fields, some financial advisors have started using AI applications in their daily work lives, employing various AI applications to answer specific questions and serve as digital assistants. Many wealth management firms are at least experimenting with AI-powered solutions for basic customer support, personalized digital marketing and other functions.
But these use cases will seem incredibly rudimentary in light of what’s coming next. The next leap forward is agentic AI—AI systems capable of taking independent actions based on advisor-defined parameters. What sets agentic AI apart from earlier AI iterations is its ability to function on its own. Users can provide a goal, like optimizing an investment portfolio for a client, and an AI-Agent will work through how best to achieve the objective – and then it can go ahead and do it in the most efficient manner.
From recommendations to independent action
What would an agentic AI solution look like for a financial advisor? While current AI applications assist advisors by surfacing insights and automating routine tasks, Agentic AI will go further. It will optimize workflows in real time, anticipate client needs, and proactively execute routine decisions—all while keeping advisors in control.
CRM applications, like Salesforce, already have the ability to independently review client emails and phone calls, using AI-enabled processes to summarize and transcribe these communications. Further, based on content and sentiment, they can provide the advisor with a series of recommendations on how to respond.
In the near-term, that’s probably how agentic AI applications will operate: as a relationship-management co-pilot, equipping advisors with enhanced decision-making, improving client engagement, and streamlining routine tasks.
In the not-too-distant future, however, agentic AI will make a critical leap. It will move from providing recommendations on how best to address an issue to determining the right solution and acting on its own. Once that threshold is cleared, advisors will be able to set up an entire framework of rules and tasks that will allow an AI agent to execute administrative tasks, optimized trades and client follow-ups – freeing advisors to focus on complex financial planning and relationship building.
Getting off the starting line
Of course, there are huge obstacles to be overcome before that kind of autonomy is allowed. The agentic AI models will have to demonstrate something close to 100% accuracy, while also passing strict compliance and regulatory reviews. Even then, it will take time for advisors to entrust client-facing tasks to independently operating AI agents. But the direction is clear: This is what the future looks like, not just in wealth management, but across financial services and in all other industries.
For that reason, advisors and wealth management firms cannot afford to wait any longer. To prepare for the potential impact of agentic AI, they will have to start playing catch-up in terms of building a foundation for AI use more generally.
For starters, firms that still prohibit AI use must shift from avoidance to governance. Instead of banning AI, create secure, compliant environments where advisors can experiment safely, and establish training programs to teach employees how to use AI as a co-pilot.
At a more strategic level, wealth managers should be conducting full-scale workflow audits to identify where AI can provide immediate value, like automating meeting prep, summarizing client interactions, and generating personalized content. Based on these results, firms should start a series of small tests targeting the lowest-hanging fruit.
Initial AI pilots should be aimed at generating operational efficiencies that will lead to advisor productivity. Starting with internal applications has several advantages. First, restricting the AI roll-out to non-customer-facing functions limits the potential fallout of any failures or mistakes. Second, by making internal operations more efficient, firms will free up advisors and other staff to take on higher-value tasks that more directly impact the client experience and outcomes.
As these tests start running, firms need to review existing control systems and, where necessary, establish new checks, guardrails and compliance tools, especially in areas like archiving, key work analysis, reviews and approvals.
Some of the biggest wealth management firms have the resources to do this all on their own. Most advisory firms will look to external partners for help in both implementing the right AI model and making sure they have the right technology stack, internal controls and compliance framework to support it.
Regardless of how they do it, the firms putting AI into action today are setting the standard for the industry. AI is not just a tool for efficiency; it’s a competitive differentiator that will separate the industry’s leaders from those left playing catch-up. The real question is no longer whether AI will reshape wealth management – it’s whether firms will take the wheel in this transformation, or get left at the starting line.
Alicia Rich is the head of client and advisor digital enablement at Broadridge.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.