Insights & Market Outlook

Artificial Intelligence will change everything – including wealth management

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Artificial Intelligence will transform most industries including wealth management.

My friends and colleagues know I love being an early adopter of technology. Jean jokes that I also love demonstrating my new “toys” to anyone who wants to gather around to see the first kindle or the first iPhone. Over the years, I have bounced among Apple, Android, and really any technology I considered  a “gamechanger”.

Without question, over the last year, progress in new technology has been faster than any other time in my life. Of particular interest to me, artificial Intelligence (AI) and augmented reality will change how we work and play in the same way as the first iPhone (remember paper maps?).

While we are still in the early stages, I encourage all of you to try OpenAI or Google Gemini, the latter only available in the U.S. for now. While it is imperfect – for example, it has so-called hallucinations by which it provides wrong information with great certainty – AI will continue to improve dramatically with profound implications. Every week we see exponential improvements; this past week, the ability to create 60 second videos based on a text prompt was announced! Shortly, AI will be embedded in our phones, desktops, and other technology, eliminating most routine tasks (possibly in the next version release).

The other big change will be in virtual reality / augmented reality. When the Apple Vision Pro comes to Canada, book a demo at the Apple Store for a glimpse into the future. Walking around with ski goggles may not be well received in your circle – it isn’t in mine! – but the form factor will change quickly.  Interacting with the real world using augmented reality will change everything; enjoying a movie on a 100inch TV on a long plane trip is 1st generation but imagine participating in virtual meetings with a lifelike image of you only a few years from now (or sooner!). Watch this interview for an example:

So what does all this mean for the wealth industry? It means that investment management will get increasingly commoditized as AI tools skillfully screen and construct portfolios in a way that is now available only to the most experienced professionals with expensive programs.  And as this commoditization occurs, wealth professionals’ opportunity to provide unique human skills will rise to the top of client expectations of us. How to talk openly and transparently about fees. How to discuss personal family-related questions and concerns on clients’ minds. Where to seek guidance on complicated questions about clients’ unique and confidential tax, succession, philanthropic and estate matters. These are conversations that go well beyond money management and AI. In short, clients will expect far more for their fees than solid investment reviews and advice. This is a good thing, in my mind.

I believe that trusted advisors will always be essential to building wealth plans for clients and helping them stickhandle the inevitable bumps along the way. What will change is the definition of value, shifting  away from investment returns to conversations and advice that are uniquely human.

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