The Pursuit of AI-Driven Wealth Management

Understanding the application of AI to business requires an understanding of context — strategy, customers, company culture, and so forth. One application worthy of study across organizations is wealth management. A number of banks and investment firms are trying to use AI to improve that management — either to eliminate human wealth advisers altogether or, much more commonly, to augment their efforts. Our survey research suggests that while many organizations have challenges with production deployments of AI, wealth management is a clear exception. We’ve studied wealth management strategies using AI and interviewed the analytics and AI officers who support them at several different companies. Not surprisingly, each organization has found a strategy niche in how it uses the technology to support advising clients on their investments. Their use of AI is suited to the types of clients they serve, the investment types they advocate, their overall investment philosophies, and the AI capabilities they possess. Some strategies, however, seem better (to our minds) than others. We can’t address all of the issues around “robo-advisers” — pundits love the name, but wealth management firms themselves generally dislike it — so we’ll focus here on three alternatives with radically different approaches.