Applying Artificial Intelligence in Wealth Management: Compelling Use Cases Across the Client Life Cycle. This is the third chapter in a series included in a new research report.

Wendy Spires, Head of Research at WealthBriefing, explores how using AI technologies right from the start of the sales cycle can help firms really ramp up their client win-rates. (To view the full report and download the link, click here.)

As Chapter 2 outlined, AI can help greatly improve the process of sourcing prospective clients, but achieving actual growth clearly depends on converting these leads into new business wins. 

Although factors like brand reputation are important, success largely depends on relationship managers’ ability to effectively articulate their firm’s offering and rapidly forge affinities with the wealthy individuals they aim to bring on board. These are eminently human skills of persuasion and relationship-building, but here again AI technologies have a lot to offer. While relationship managers will pride (and sell) themselves on a talent for converting prospects into clients, they and their employers should be very keen to utilise all the assistance they can. 

Diminishing client loyalty has been a well-discussed trend. However, the pain of changing providers makes it fair to assume most wealthy individuals will still be looking to forge the kind of very enduring relationships institutions also seek. Entering one can therefore be a finely-balanced and very drawn-out buying decision which in the UK averages at around five months in length. 

Many things can derail the process, not least arduous due diligence/onboarding requirements, meaning that client win-rates can often be dishearteningly low - even when HNWIs have actively sought out providers. "People using our matching service are by definition red-hot leads who have been lined up to meet with potentially perfect matches," said Lee Goggin, Co-Founder of findaWEALTHMANAGER.com. "Even still, wealth managers' success converting these individuals into signed-up clients varies massively, with some seeming to really struggle here."

In Goggin’s experience, even the best-converting firms still only “land” about 40 per cent of the prospective clients they meet. Any advantage technology can provide to help quickly build their enthusiasm and then maintain it over several months will therefore be a boon. 

Making meetings really count
The challenge of securing that first meeting with time-poor (and often internationally mobile) prospects creates an imperative to make initial meetings really count. Even in the very early stages of courting prospective clients, a huge amount of information on them can be brought to bear. 

An effective profile will amalgamate details which have actively been given to the relationship manager and those gleaned behind the scenes from the all the publicly accessible and paid-for information sources that continue to proliferate. These include business information databases; companies which track liquidity events and the histories of HNWIs; alternative data sources like mainstream or social media; and PEP/watchlists (which may yield much useful intelligence beyond giving individuals a compliance “green light”).  

Through Natural Language Processing (NLP), AI has the ability to rapidly read thousands of documents across all these data sources in whichever languages they occur, before synthesising all this information to create a concise and genuinely useful “primer” on prospective clients. All the preparations required for a highly efficient and valuable meeting can then also be automated, with the technology identifying the most pertinent topics for discussion and gathering materials that will illustrate the most relevant elements of the firm’s value proposition and the advisor’s expertise.

As Alessandro Tonchia, Co-Founder of Finantix, observes, time is of the essence – both in terms of advisors’ workloads and the number of firms that might be simultaneously vying for the business of HNWIs. “If your prospect is an entrepreneur in fintech, they will appreciate you having your organisation’s latest report on the sector and other research ready for discussion,” he said. “Aggregating the right knowledge to showcase, and being able to quickly zero in on their specific needs and concerns is vital.”

Importantly, AI-enabled analyses will also help firms ascertain individuals’ favoured communication channels (and languages), further improving the odds of winning their business when others may be making clumsier attempts. As David Teten, Managing Partner of HOF Capital, argued in Chapter 2, sales success is all about “being on the same page” as investors making AI invaluable in quickly deciding who to sell to, the best means of reaching out to them and what to present them with. 

It is likely that AI will become even more helpful as wealth managers increase the ways they habitually gather information on prospects and clients. While at present firms might be constrained by concerns about being perceived as spying on people, our experts pointed out that the next generation of clients are likely to have no such qualms – as long as they see value, like better service, from their data being used.  

“Social media habits mean the young have a very different concept of privacy to the older generations,” said Peter J Scott, an expert author on AI’s potential. “They are comfortable letting anyone who cares to know what they are doing, who they are with and what they are eating – and all manner of firms, including wealth managers, will be able to leverage this information on habits and preferences in many, many ways.”
 

Powerful proposals
Much will depend on marrying “soft” details with hard financial facts, however: really resonating with potential clients will still hinge on the product and service proposal put forward, our experts cautioned. This will serve as the first, most important proof-point of how well the relationship manager has listened to the individual and how good a fit the firm is for their wants and needs. 

AI-enabled technology can greatly streamline the production of proposals by using automated reasoning to generate initial investment and financial planning recommendations. Importantly, the dynamic profiling of clients can continue during meetings with complex calculations refined automatically as more information emerges meaning that proposals can potentially be perfected “live” rather than sent on later when momentum has been lost. Advisors can also be guided by analytics on what has appealed to similar clients before. 

As the panellists observed, both of these capabilities are just what is required in today’s fast-moving world where mobile devices mean meetings are no longer confined to office environments. “By having richer profiles on prospective clients, and real-time information on what does and doesn’t work, advisors will be able to rapidly reorganise themselves out there in the field,” said Tonchia.

Perhaps most important of all, automated reasoning will also ensure that proposals are always compliant with both the relevant external regulations and the institution’s internal policies. While not necessarily experts in all the regulations that might conceivably apply, relationship managers are nevertheless responsible for much of the upfront compliance work required to onboard a client and sell them only permissible products. The rules around cross-border business can be incredibly complex. This can create significant compliance risks, and as Chapter 4 discusses, it also means onboarding can be unduly arduous for both client and advisor. Proceedings can be very much streamlined by AI, particularly when combined with other technologies like dynamic forms which expand or contract depending on the answers clients give to regulatory questions.

“It’s about having the right information at the moment where you need to make a compliance decision,” said Tonchia. “You cannot afford to start searching for the relevant manual and looking for an answer or to tell the client, ‘wait here’ while you consult an expert; you need the compliance summary in real time.”

Preventing firms falling down on the follow-up
In addition to making initial meetings more productive, AI technology can also be invaluable in the follow-up phase – an area where Goggin sees firms often falling down. As previously discussed, it can take several months for even highly-engaged individuals to finally sign up, and efforts to court prospects have to be sustained and carried out in an efficient sequence. Here, AI can provide very useful enhancements to existing Client Relationship Management systems. 

“Today’s technology makes it possible to record the whole client meeting, transcribe the recording and scan every sentence to see if it indicates a task,” said Tonchia. “If we detect something like ‘send the client information on hedge funds’, ‘organise a meeting with the FX specialist’ or ‘schedule a meeting next week to review the portfolio’ we can automatically enter it into the advisor’s to-do list and generate the communications needed to get those things done. Or we can do the same off the notes typed during the meeting.”

As described in Chapter 6, AI also enables the deep personalisation of investment news and research content, such by Machine Learning techniques ensuring that investors are only sent what is relevant and of most interest, and with their communications preferences always observed. These capabilities can clearly also be applied to prospects so that receive a steady drip of highly impactful content rather an undifferentiated deluge which may annoy them more than anything else. 

It should always be remembered that wealth management is a premium service that sells itself on customisation and the personal touch. Therefore, firms - and their advisors - should seize every opportunity to make potential clients feel valued and positively known as early in the sales cycle as possible. As our experts observed, the boost AI technology can give to time-honoured sales skills is too great to ignore.

“I think it takes a lot of chutzpah to think that you’re not going to benefit from a coach that helps you to say the right things to sell,” Teten concluded. “It’s natural for people to feel nervous about any part of their job being automated or augmented by technology, but over time the refuseniks are going to find they’re completely beat out by competitors who do make use of it.”