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KEY TAKEAWAYS

• Affluent investors are both skeptical about cutting-edge tech and open to using it.
• Younger generations show considerably more interest in AI and other emerging tech tools.
• Go slow with new tech—take a phased approach and solicit feedback.

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FACE THE FACTS

CEG Insights recently surveyed more than 800 investors—all with at least $100,000 in net worth, but most with a net worth of at least $1 million.*—on the topic of cutting-edge technology. Here’s what they told us:

1. They remain skeptical. Despite AI’s explosive growth in recent years, affluent investors aren’t so sure it needs to be part of their client experience with advisors. As Exhibit 1 shows, 38.9% of investors are skeptical about advisors using AI and other advanced technologies—and nearly the same percentage have no expectations about their advisors using such tech.

That said, double-digit percentages of investors would like to see advisors use advanced technology to deliver benefits such as proactive insights, enhanced security and 24/7 availability.

Exhibit 1

2. Many are open to advanced tech being used in the investment process. A significant percentage of investors (43%) are at least somewhat open to their advisor using cutting-edge technology in investment selection and wealth management (see Exhibit 2). That said, only about 6% say they’re enthusiastic about the idea.

Exhibit 2

3. Clients’ age is a big factor. Not surprisingly, younger generations show a greater interest in their advisors using advanced tech than do older generations. As Exhibit 3 shows, overall interest in advisors using AI, big data analytics, quantum computing and the like is relatively low. But millennials, in contrast, show a disproportionate interest in having these tools as part of the investment process. Sizable percentages of Gen-Xers also want to see these technologies used.

Exhibit 3

 

INSIGHTS INTO ACTION

So where does all this data leave you? Here are a few key steps to consider as you move forward:

1. Think more about outcomes than technology. At the end of the day, clients are interested in outcomes—and advisors always do a lot better when they talk to clients in terms of outcomes as opposed to process. Look to incorporate technology that will help you deliver more impactful outcomes. And make those outcomes—not the tools and all the details behind them—your main points when talking with clients.
2. Consider your business processes. Focus on advanced technologies that can really improve the client experience or make your business run more efficiently.
3. Get started with AI. Artificial intelligence is here to stay—and being an early (or somewhat early) adopter may give you a competitive advantage while mitigating future risks. Additionally, using AI now will provide invaluable insights into its capabilities and limitations, helping you better prepare for future industry shifts. Certainly we find that AI enables content creation—emails, client presentations, workshops and so—at a much faster pace than ever before.

But take a phased approach: Establish clear goals for what you hope to achieve with AI, such as enhancing customer service or improving operational efficiency. Then, research reliable AI vendors whose offerings align with your needs. And start small, soliciting feedback from staff and clients along the way.

Ultimately, you probably don’t have to race to get emerging technology tools up and running in your practice. But you also can’t ignore them or pretend they’re unnecessary. By taking some measures steps now, you may find yourself in a great position when technology that’s seen as new today is considered to be vital tomorrow.

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