The wealth management systems' business casts its eyes on the benefits of broader, more "holistic" advice and services.

US advisors can add as many as 300 or more basis points in annual value for clients by making portfolios more tax efficient and coaching clients about behavioral finance, according to a study from Envestnet.

Wealth advice is growing in scope and advisors must increasingly add value beyond investments for their clients – such as through estate planning, tax advice, loan and credit management, life insurance, and health planning â€“ the report from the wealth management systems' business says.

The report examined trends including how artificial intelligence, for example, is and will affect the wealth industry value chain. 

There is also “significant demand” among advisors for end-to-end technology platforms and improved integrations. This extends beyond single sign-on capabilities to “deep connectivity between systems and software providers,” Envestnet said. 

"The wealth management market has long faced challenges with fragmented technology and inefficient workflows," Chris Shutler, head of strategic development and market intelligence for Envestnet, said. "Our research highlights key trends such as industry and tech stack consolidation and convergence, the shift toward more complete financial life management, the growth opportunity for advisors offering retirement plans, and leveraging data and AI to provide personalized services."

Envestnet’s research shows a growing client demand for personalized services, achievable through data aggregation and next-best-action insights. Most advisors (60 per cent) see the potential for these types of insights to improve their business or advice to clients but have yet to implement them.

Next-best action
Of those firms who are leveraging AI-powered next-best-action insights, many are seeing not just enhanced efficiency but improved client interactions and service delivery, the report continued.

Envestnet referred to the machine learning models that power its Insights Engine, a solution within Envestnet Wealth Analytics. This technology learns patterns from data and highlights certain sets of patterns to human experts who then decide how to act on these highlights. 

"AI-powered next-best actions will disrupt the standard advisor workflow. These systems will drive efficiency, productivity and sales results to unheard of levels,” Craig Iskowitz of Ezra Group, said.

The report also noted a double-digit growth rate for managed account assets as people move from commission-based to fee-based accounts. Envestnet said it expects unified managed accounts to remain the fastest growth area of managed accounts as they allow multiple investment vehicles to be combined into a single account.