If Amazon launched a financial advice service, what would it look like? And how could Taylor Swift help advice firms grow?
These were just two challenges thrown down earlier this year at our annual conference, NextWealth Live.
Speakers shared insights into a future that just a year or two ago might have sounded fanciful but, with tech changing our habits and rapid advances in artificial intelligence, they are now becoming a reality.
Think about who you are really up against
Our industry is very good at looking internally and tweaking elements to make improvements.
That is all well and good, but people younger than the current typically middle-aged investor think and act differently, and their expectations for the products and services they buy are a world away from the traditional.
So, perhaps some of the real threats to the status quo come from the behemoths online – think Amazon and TikTok.
On average, 20 to 27-year-olds are spending two hours and 27 minutes on TikTok every day and TikTok has reached 1bn users in about a quarter of the time it took Facebook to get there.
So you may be sceptical about a video-sharing site being a threat to your business but the point is valid: video content generation is for the masses and people are engaging in very different ways. Is your business harnessing this trend?
Sandy Kaul, head of digital asset and investor adviser services at Franklin Templeton, has some specific views on how advice firms might change.
Based on research Franklin Templeton carried out in 2023 with firms that represent around $48tn (£37tn) in AUM, Kaul believes AI has a lot to offer financial advice firms.
Last year was the breakthrough year for generative AI, with ChatGPT being the game-changer. The Franklin Templeton research suggests AI is now set to advance the way clients are supported, with greater personalisation of reports and communications and more tailored and directed client cohort communication and analysis.
Indeed, NextWealth’s own research on AI in wealth management suggests that after the low-hanging fruit of operational efficiency, personalisation of communication is high on the priority list for AI use-cases.
From chatbots to actbots
While chatbots answering customer queries are still pretty rudimentary, Kaul says they are going to get better and become "smartbots" or "actbots". Instead of just chatting, they will be able to take over basic functions, such as transferring money on the client’s behalf or adding a position to a portfolio.
Technology from the metaverse is advancing so rapidly that soon we will be able to create an avatar that looks like the adviser and embed a chatbot inside it to interact with clients for simple requests and updates. This in turn will allow one adviser to go from servicing the current average of 94 clients to servicing hundreds, maybe even thousands.
