Artificial intelligence is reshaping financial services, but not in the way many headlines suggest.
While much of the conversation focuses on automated trading or AI-powered investing, the real transformation is happening deeper in the system, inside the operational infrastructure that powers wealth management platforms. From onboarding and compliance to research workflows and client personalization, AI is changing how financial advisory firms operate, scale, and compete globally.
As we enter into a new chapter of financial industry, it’s not that firms are going to use AI to grow and compete, it’s that they’re going to build the infrastructure and data necessary to actually use it.
Episode 5: AI in Wealth Management: Why Infrastructure and Data Will Define the Next Era of Financial Advisory
Host: Michael Petrilli, Director of NextGen Investing
Guests: Marla Sofer, Founder & CEO, Knomee| Shantanu Jha, Co-founder, Beaconsfield Capital and Xynon| Barry Bernstein, Managing Director, COO – Technology Services, ViewTrade
This podcast is a deep dive into how Artificial Intelligence (AI) is changing wealth management, financial advisory firms, and fintech infrastructure. We bring together thought leaders in fintech, advisory technology, and brokerage infrastructure to discuss where AI is having the biggest impact and what this all means for the future of finance.
How AI Needs Better Data to Transform Wealth Management
One of the most significant things we can learn from this conversation is that there is simply no chance of AI changing wealth management without improving data quality. Yet despite all the technological advances made over the last few decades, financial services still suffer from poor data quality and fragmented client data. Many financial firms are still only using data related to financial transactions and are yet to develop a more profound understanding of their clients’ desires regarding their wealth.
For AI in financial advisory services to have real impact, financial firms must develop better behavioural data related to their clients, their attitudes, and their perceptions about investing and wealth. Only then can financial firms move beyond generic financial advisory and into more personalized wealth management.
Once financial firms have access to quality behavioural and financial data, AI-based wealth management solutions can combine this data and provide financial advisory services with more personalized and accurate financial solutions. This change from financial product-based advisory services to data-based client advisory is one of the most significant changes being witnessed in financial wealth management.
Key Takeaways:
- AI Is Driving Efficiency Before Growth: The first application of AI in wealth management is related to the growing efficiency of financial advisory services.
- Operational Bottlenecks Are the First Target for AI: AI is compressing long and laborious processes in financial advisory services and turning them into more efficient and effective processes.
- Clients Are Asking for Outcomes, Not AI: Clients are not looking for AI-based financial advisory services; they are looking for faster solutions and better financial outcomes.
- AI Adoption Varies Significantly Across Regions: While there is an increase in experimentation with AI across geographies such as the US and other markets, AI adoption is still five to ten years behind in other regions such as APAC.
- Better Data is the Foundation for Effective AI: Financial services face a major problem of fragmented client data. Financial services cannot be effective with AI without good data.
- Understanding Investor Behaviour is More than Just Transaction Data: AI has to understand how investors think and feel about financial decisions, not just what they have or what they have done.
- Industry is Faced with the Increasing Need for Differentiation: With all and sundry able to get access to the same financial data and technology, wealth managers face a challenge of differentiation through better understanding of clients and providing personalized advice.
- The Role of Financial Advisors is Evolving to Relationships: Financial advisors are no longer just needed to provide advice on financial products; with technology taking over all other roles, they have to be relationship experts.
- Fees for Financial Advisors are Likely to Compress: With greater transparency and technology available to everyone, fees for wealth managers are likely to come down.
- AI is Likely to Democratize Financial Advice: With technology and AI reducing operational costs, financial services are likely to become more accessible to more people.
- Technology is Not Enough to Replace Human Judgment: In regulated financial markets, technology is not enough to replace human judgment and decision-making because AI cannot assume responsibility for financial decisions.
The Future of Wealth Management: AI, Data, and Democratized Financial Advice
The technology of artificial intelligence has already begun to shape the operations of wealth management firms, be it the way operations are streamlined or the way financial advice can be more personalized. But, as the conversation makes clear, technology alone will not be the key to revolutionizing financial services.
The key to true AI readiness in the wealth management industry starts with data, process, and fintech infrastructure. Without these, AI technology will simply point to the problems in the operations, which will not lead to any competitive advantage.
As technology and financial data become more accessible to the masses, the real point of differentiation between financial advisory firms will be how well the institution understands their clients, how they think, what they want, and how they can be guided towards making the best financial decisions despite the complexities of the process.
Technology and operational efficiency will also be the key to more individuals having access to financial advice and being able to participate in the wealth creation process and take control of their financial futures.
The firms that will be successful in the next era of AI technology and wealth management will be those that are able to leverage technology with trusted relationships, strong financial infrastructure, and understanding their clients and how they think.
Disclaimer: The views expressed in this episode are those of the speakers and do not necessarily reflect the views of ViewTrade or its affiliates. This discussion is for informational purposes only and is not investment, legal or tax advice, nor an offer or recommendation to buy or sell any security. Private-market and pre-IPO investments involve significant risk, may be illiquid, and are not suitable for all investors.
