Premium client services: Advisors’ best defense against AI

A financial advisor’s workday is a tug-of-war between happily engaging with clients on the one hand and grudgingly interacting with operations, trading, and compliance on the other. In other words, you’re hunkered down trying to keep up with a host of competing demands.

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All that’s fine and unavoidable. But I’d encourage you to look up from time to time to get a sense of where the industry and your firm — and thus your career — are headed. Here’s what I’m seeing.

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Bodies to bots?

Leaders of the biggest and fastest-growing RIAs are focused on data management, data utility, and next-generation data mining as foundational capabilities, with the platform itself emerging as the primary source of competitive advantage.

Artificial intelligence is no longer a mere tactical enhancement for practices. Rather, it is becoming the backbone of enterprise value creation.

Given that, prepare to hear more about the shift from “bodies to bots” as “digital employees” augment — and in some cases replace — human workers.

With cloned traders, AI-powered market commentators, and personalized client-facing avatars no longer theoretical, savvy financial services CEOs are asking how regulators will respond to these developments, how employees will adapt, and how client trust will be preserved in an increasingly automated environment.

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Wealth management’s future

Against this backdrop, RIA leaders are openly debating the possibility of replacing interns and entry-level staff with machines, and what that means for developing the next generation of talent.

Larger societal questions also arise. If universal basic income becomes the norm, for instance, how might that reshape client expectations? Most importantly, when will these and other questions reach the point where they need to be actively dealt with?

As investment solutions become increasingly commoditized, advisors’ interpersonal skills will become the true differentiators for firms.

Technology will enable personalization at scale, but it is the human connection that will define premium client experiences. And if that doesn’t prove true for you as an advisor, expect to be out of work.

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Expanding array of services

But worry not. The RIA CEOs I talk to say they expect client service models to expand.

It’s been a long time since clients were satisfied with merely getting portfolio management services; they now expect — and most advisors provide — advice on taxes, insurance, real estate, college planning, estate planning, and more.

This array won’t be enough, though. Client services of tomorrow will routinely include cash management, bill paying, family governance, cybersecurity, and a convergence of health and wealth — particularly around longevity planning.

All these developments will create both a growth opportunity and a defensive moat against commoditization. RIAs will be less defined by products and more by platforms going forward, true. But their people, purpose, and services will remain prime drivers of growth.

Over the next several years, you’ll see the biggest and best firms balance innovation with humanity, growth with stewardship, and efficiency with trust. Laggards on these fronts will merge with the large, leading firms. The practices that remain oblivious will be gone.