Professional Wealth Management: AI’s true colours shine through better client outcomes

Much of the wealth management industry still frames AI as either a replacement threat or a scale tool for advisers. We often hear of the grand promises of AI, like helping each adviser significantly multiply the number of clients they serve, closing the advice gap.

There are a few critical issues with this narrative. They are worth examining when we seek to identify where AI’s true potential lies.

Firstly, clients do not choose advisers primarily for efficiency; they choose people they can trust with the most important decisions that affect their lives and families.

Second, the current high-touch, episodic service model will struggle to scale to 1,000 clients — and if you ask advisers what they would do with two extra hours a day, it is rarely “hold more meetings”.

They are more concerned with the client family dynamic they seek to understand, the hard conversation they need to prepare for, or the new service they know clients need but cannot yet deliver.

Lastly, although technology has provided a powerful mechanism to help democratise access to investing, we have also seen that more access and choices don’t necessarily lead to better outcomes.

In a world of abundant intelligence, an accelerating pace of change, and a cacophony of noise, where people need more continuous guidance across a broader set of financial and life decisions, the real opportunity for AI becomes apparent. It can help advisers become more present, more prepared and more valuable to their clients in the moments that matter.

Bridging the gap

The advice gap is often framed as a supply problem: too few advisers, with services out of reach for too many people. This is true, but incomplete.

While most analysis, including research from the UK’s Financial Conduct Authority, focuses on the small number of UK consumers — just 9 per cent, less than 5mn people — receiving regular financial advice, investor sentiment is equally important. Recent Morningstar research found that 60 per cent of UK investors feel uncertain or nervous about current markets.

High-touch service depends on context, trust, timing and judgment; it is difficult to scale without changing how work gets done. Closing the advice gap will require firms to redesign the operating model.

The ongoing first wave of AI adoption understandably focuses on productivity. McKinsey estimates that productivity levers, including AI and technology-enabled operating model changes, could increase adviser capacity by 10 per cent to 20 per cent over the next decade.

It is impressive to see what intelligence and technology now make possible that we couldn’t imagine two years ago. Innovations include AI-enabled research, note-taking, and client outreach. However, the myriad number of solutions proliferating in the adviser ecosystem risk creating more distraction for advisers and their clients, rather than real value.

Many advisers see their sustainable competitive advantage as their ability to better understand and achieve client goals. Even with more time, they don’t want to spend it worrying about tools and connectors. Advisers benefit from working with trusted partners who can curate the technology and operations ecosystem and provide the right insights, information, and experiences to allow them to focus on helping clients across multiple aspects of their life goals.

Emerging reality

The old paradigm was that an AI-enabled interface for investors risked replacing the adviser. The emerging reality is that the future of advice is more likely to be a spectrum of connected experiences across an investor’s needs, complexity, confidence and stage of life.

AI tools can support more continuous awareness: helping investors understand their options, identify the next question, recognise when their circumstances have changed, and know when certain moments require human advice. Advisers can then focus on curating experiences where judgment, context and trust matter most.

There is growing evidence that investors prefer this combination. Research from HSBC and Ipsos found that while 73 per cent of affluent and high net worth investors surveyed use AI for finance and investment, only 12 per cent said AI was the most influential factor in their most recent investment decision. Financial professionals and institutions remained the leading source of investment ideas, cited by 62 per cent.

The message is clear: investors may expect more technology, but they still need human judgment. AI can make research, education and analysis more accessible. Trusted advisers provide accountability and the ability to translate that information into action.

The best advisers have never been valuable because they had more information than everyone else. They are valuable because they help people make sense of information in the context of their lives. In an AI-enabled world, that craft and curation matter even more than before.

The next generation of advice will not be defined only by better portfolio construction. It will be defined by how well advisers help clients connect financial decisions to the lives they are trying to build, from tax strategy and inheritance planning to philanthropy, behavioural coaching, retirement identity and family governance. These are not side conversations around portfolio construction; they are the foundational work of advice itself.

The following information can be sourced to the Financial Conduct Authority:

• Only around 9% of UK consumers receive financial advice, equivalent to 4.6 million people.

The following information can be sourced to Morningstar:

• 60 per cent of UK investors feel uncertain or nervous about current markets.

The following information can be sourced to McKinsey:

• Productivity levers, including AI and technology-enabled operating model changes, could increase adviser capacity by 10 per cent to 20 per cent over the next decade.

The following information can be sourced to HSBC and Ipsos:

• While 73 per cent of affluent and high net worth investors surveyed use AI for finance and investment, only 12 per cent said AI was the most influential factor in their most recent investment decision.

• Financial professionals and institutions remained the leading source of investment ideas, cited by 62 per cent.