Artificial intelligence is everywhere, but not everywhere in wealth management—yet.
In fact, as we frequently note in our weekly AI & Finance column, financial AI has yet to really make a significant impact on the public consciousness.
Sure, the financial services industry is using artificial intelligence—often to serve as a digital assistant for back-office processes and operations and a reference point for advisors, brokers, lenders and underwriters. It’s just not yet using AI in a manner that the public would be able to recognize, outside of a few rudimentary chatbots.
And the prevailing conventional wisdom is that wealth management will end up being one of the last industries to fully embrace AI. Generally, this opinion is based on the numerous regulatory hurdles that come with adopting new technologies and processes in the industry, the average age of practitioners and their ideal clientele, and the continued success of wealth management’s traditional service models.
Perhaps there’s also a little bit of past-as-precedent thinking among wealth managers, as supposed existential threats from robo-advisor technologies ended up being, for the most part, much ado about nothing.
While the conventional wisdom may prove correct, it may also end up doing lasting damage to the traditional wealth management industry as it allows for a spirit of technological complacency among practitioners and firms alike.
The widespread belief is that human intelligence will always be preferred by the ideal clients of financial advisors to artificial intelligence. Some practitioners likely take that assumption to another degree of extremity: That human intelligence is now and will always be superior to artificial intelligence.
Yet as technology becomes more complex, the inherent complexities of wealth management become simpler for technology to untangle. At some point, when brought to bear on a large financial services firm’s operations, an AI wealth manager will encounter every feasible question that can be asked about a household’s wealth and financial future, and every potential answer to those questions. At that point, AI will be able to solve for any financial question, for any person, faster and more reliably than a human intelligence. We can call this point the wealth management singularity.
Given the rapid growth and adoption of generative AI across the economy, we are accelerating, albeit at an unknown rate, towards this singularity, regardless of whether the incumbent greater financial services industry fully adopts AI within its front-office operations.
When the singularity occurs, if financial advisors and their firms have failed to embrace AI, they will be replaced by technology that can do their jobs cheaper, faster and more accurately than a human intelligence, and a new leadership will emerge within the industry.
Let’s get to some headlines…
Advisor360
Forty-three percent of registered investment advisors (RIAs) are asking for better marketing capabilities, according to recent research from Advisor360°. Now, financial advisors using Advisor360°’s integrated suite of solutions can amplify their business-building efforts through a new integration with FMG, the industry’s only all-in-one marketing technology solution.
In addition to including FMG’s premium website package on its platform through single-sign-on (SSO), Advisor360°, a leading provider of software solutions for enterprise wealth management firms, has integrated FMG’s with its workflow engine, document vault for books and records storage, and entitlements functionality to help the home office better manage advisors’ marketing efforts.
FMG features compliance and publishing tools that enable enterprise wealth management firms to easily review, accept, or reject changes to advisor websites, and provide syndicated content to share with clients and prospects. With the Advisor360° integration, site updates and records of content changes are automatically saved in a SEC Rule 17a-4 compliant vault, streamlining compliance steps for the advisor and the home office.
Altruist
Altruist launched TaxIQ, a suite of tax management tools designed to help advisors maximize clients’ after-tax returns. Until now, the highly quantitative nature of tax management has limited firms’ abilities to provide these strategies at scale. With TaxIQ, Altruist advisors can automate tax savings with the click of a button. The technology is native to Altruist’s platform, which also includes capabilities for account opening, trading, rebalancing, reporting, and billing.
With Americans paying roughly a third of their lifetime earnings in taxes, seizing opportunities for tax efficiencies can drastically improve portfolio outcomes. Research suggests that advisors who leverage tax management solutions can outperform the market by 1-2% per year1 while avoiding techniques like market timing and individual stock picking. Sophisticated tax strategies, however, have traditionally been time-consuming and quantitatively intensive, making them inaccessible to all but high- and ultra-high-net-worth clients.
TaxIQ enables advisors to implement gains deferrals, wash sale avoidance, and opportunistic tax loss harvesting at the account level, all processed through Altruist’s automated, tax-sensitive rebalancer. Once fully activated, Altruist advisors will be able to pursue tax alpha on behalf of their clients without managing individual positions, selecting tax lots, or timing trades.
Betterment
Betterment, the largest independent digital financial advisor, announced that Betterment for Advisors, its RIA custody division, has added new integrations with eMoney Advisor, Kwanti and Panoramix, which are available immediately to all advisors on the platform.
Independent advisors need tools and software that can work together seamlessly. With these new integrations, RIAs on the Betterment for Advisors platform can connect to the following tools: eMoney, where advisors can sync all client account information, holdings, transactions, and tax lot information for comprehensive financial planning; Kwanti, where advisors will have access to Kwanti’s client proposal tool and ongoing portfolio analytics to optimize their portfolio strategies; and Panoramix, where advisors will have access to customizable billing and performance reporting across custodians for a more efficient back office
BlackRock
BlackRock agreed to acquire Preqin, an independent provider of private markets data for £2.55 billion or approximately $3.2 billion in cash. Bringing together Preqin’s data and research tools with Aladdin’s complementary workflow capabilities in a unified platform will create a preeminent private markets technology and data provider. The acquisition adds a highly complementary data business to BlackRock’s investment technology, marking a strategic expansion into the fast-growing private markets data segment.
Private markets are the fastest growing segment of asset management, with alternative assets expected to reach nearly $40 trillion by the end of the decade. As institutional and wealth investors increase allocations to alternatives, BlackRock has built a leading private markets franchise to meet this client demand. There is an even greater need for standardized data, benchmarks, and analytics that enable investors to better incorporate private asset classes into portfolios and provide fund managers with better data and tools to deliver outcomes for clients. Private markets data is estimated to be an $8 billion total addressable market and growing 12% per year, reaching $18 billion by 2030.
Preqin empowers investors to make better decisions by providing data and insights that increase transparency and access across the global alternatives market. With a 20-year history, Preqin is a leading independent data solutions provider in private markets with global coverage of 190,000 funds, 60,000 fund managers and 30,000 private markets investors, reaching more than 200,000 users, including asset managers, insurers, pensions, wealth managers, banks, and other service providers. In 2024, Preqin is expected to generate ~$240 million of highly recurring revenue and has grown approximately 20% per year in the last three years.
BlackRock
BlackRock today announced a strategic partnership with financial technology firm GeoWealth expanding BlackRock’s capabilities to meet client needs in the $37 trillion U.S. wealth market. Through the partnership, BlackRock will offer custom models via GeoWealth’s platform that enable advisors to meet client demand for private markets, direct indexing and fixed income SMAs – in addition to traditionally offered ETFs and mutual funds – in a single account.
The agreement with GeoWealth will expand BlackRock’s custom models business, which represents its fastest growing models segment, generating $31 billion in new assets over the past four years. BlackRock currently partners with several wealth platforms that offer implementation of custom models. Some of the first custom models to be available on GeoWealth’s platform are expected to include private market strategies alongside ETFs and mutual funds. That offering will provide advisors with a streamlined and scalable solution that combines public and private markets in one portfolio solution, simplifying access to an in-demand yet historically difficult-to-access asset class.
As of December 31, 2023, the GeoWealth platform has over $28 billion across more than 180,000 accounts and nearly 200 RIAs. In 2023, GeoWealth expanded its third-party model marketplace to include over 700 models from more than 70 asset managers. GeoWealth began offering BlackRock products in 2021, including BlackRock’s standard models, and launched Aperio and fixed income SMAs as standalone strategies earlier this year.
Evergreen Money
Checking accounts are one of the largest sources of lost income in America: the average American has $16,891 in them, most of which earn practically zero interest. To help close this earning gap, Evergreen Money, a new digital wealth advisor launched and introduced Liquid Treasuries, a first-of-its-kind, tax-advantaged account that earns a 5.31% yield while offering the conveniences of traditional checking.
Founded by Bill Harris – the former CEO of Intuit, the former CEO of PayPal, and founder of Personal Capital – Evergreen Money brings together his years of experience at the intersection of investing, tax and tech to reimagine a traditional checking account and maximize returns.
Deposits in Liquid Treasuries are automatically swept to invest in US Treasury Bills, which provide a 5.31% yield. Not only is this rate higher than most high-yield savings accounts, interest earned on Treasury bills in Liquid Treasuries is also exempt from state and local taxes, which can reach as high as 13.3% in high-tax states like California. In addition to these benefits, users can also enjoy the benefits of traditional checking accounts, including a debit card, ATM access, ACH payments, direct deposits, and wire transfers.
Luma Financial Technologies
Luma Financial Technologies announced their latest partnership with Gradient InsuranceBrokerage, LLC (“Gradient”), an independent marketing organization specializing in fixed annuities and life insurance. This collaboration is poised to empower Gradient’s proprietary KonnexME platform, equipping financial services professionals (“FSPs”) in the annuity sector with exclusive access to Luma’s extensive suite of educational resources, state of the art analytics, advanced suitability tools and comprehensive product lifecycle capabilities.
Luma is at the forefront in developing comprehensive annuity solutions, delivering extensive tools encompassing learning, assessment, configuration, comparison, and order tracking functionalities. Newly available educational resources for Gradient’s FSPs include NAIC carrier product training and carrier marketing materials, aiding FSPs in positioning the benefits of annuities effectively and compliantly. Furthermore, Luma’s resources empower FSPs by providing extensive data on the entire annuity lifecycle and streamlines the product discovery process, enabling FSPs to efficiently compare and assess various annuity products.
Through comprehensive support offerings and business coaching, Gradient is committed to providing FSP-first support, specialized expertise, proven marketing systems, and comprehensive value-added professional and educational services. With the integration of Luma into KonnexME, FSPs gain access to client-level performance reporting and alerts for product events, reinforcing their commitment to driving optimal client outcomes through personalized services.
MoneyLion
MoneyLion announced the appointment of Jon Kaplan as the company’s first Chief Revenue Officer (“CRO”). Kaplan brings a wealth of experience and a proven track record of driving growth and innovation at iconic technology companies, including Pinterest (NYSE: PINS) and Google (NASDAQ: GOOG).
In this role, Kaplan will lead MoneyLion’s go-to-market strategy, with a focus on expanding the market share of MoneyLion’s leading digital financial ecosystem. He will also leverage MoneyLion’s data assets to deliver new revenue opportunities and drive success for MoneyLion’s enterprise clients and retail customers alike.
Prior to joining MoneyLion, Kaplan served as CRO of multiple companies, most recently as the CRO of Madhive, a streaming television technology company backed by Goldman Sachs. Prior to Madhive, Kaplan was the CRO at Pinterest for six years, where he grew revenue from $100 million to over $2.5 billion. Before his time at Pinterest, Kaplan spent over 12 years at Google, where he led the Financial Services national sales team and later transitioned to Vice President of U.S. Sales and Operations, managing all of Google’s advertising products, including Google search, display (GDN), programmatic (DoubleClick), video (YouTube), and mobile, driving billions in revenue.
Morgan Stanley Wealth Management
Morgan Stanley Wealth Management announced the next innovation milestone in its AI @ Morgan Stanley suite of GenAI tools for Financial Advisors (FAs). The new AI @ Morgan Stanley Debrief is an OpenAI-powered tool that, with client consent, generates notes on a Financial Advisors’ behalf in client meetings and surfaces action items.
After the meeting, it summarizes key points, creates an email for an Advisor to edit and send at their discretion, and saves a note into Salesforce.
AI @ Morgan Stanley Debrief comes after Morgan Stanley Wealth Management announced its relationship with OpenAI as its only wealth management strategic partner in March 2023 and fully rolled out the AI @ Morgan Stanley Assistant in September 2023—an award-winning2 GenAI powered chatbot offering FAs quick access to all of Morgan Stanley’s intellectual capital. To date, 98% of Financial Advisor teams have adopted the Assistant.
Norm Ai
Norm Ai raised a fresh round of capital. The company has secured a $27 million Series A led by Coatue, with participation from Bain Capital Ventures, Blackstone Innovations Investments, New York Life Ventures, Citi Ventures, TIAA Ventures, and Jefferson River Capital, the family office of Tony James, the former President and COO of Blackstone. Over the past 11 months, Norm has raised more than $38 million from leading firms.
Norm has built the first AI platform for converting regulations into computer code. The team of AI engineers and legal engineers developed a proprietary language to represent government regulations and corporate policies as decision trees that become executable computer programs by leveraging powerful large language models. These programs, called Regulatory AI Agents, automate compliance analyses to make them more efficient, comprehensive, and accurate. The Norm approach also sets the foundation for integrating AI more deeply into businesses by ensuring that AI-driven actions and content from generative systems adhere to policies through a Regulatory AI agent overlay.
Fortune 100 companies deploy Norm Ai for critical regulatory assessments. For example, insurance companies and asset managers accelerate their publication of highly regulated content while freeing large amounts of bandwidth for other tasks. By automatically providing clear, actionable explanations for proactive compliance findings, Norm Ai empowers business users to self-serve initial rounds of regulatory compliance reviews. By producing actionable feedback across all regulatory parameters, Norm Ai enables in-the-weeds compliance users to evaluate and finalize content against regulatory requirements in minutes, not days.
Orion
Orion announced the availability of standalone solutions and a new bundled offering to provide advisors unparalleled flexibility. Orion’s new à la carte and bundled offerings allow advisors to tailor their approach and conduct business as they see fit – choosing from fully insourced to fully outsourced technology and/or wealth management solutions and everything in between. By delivering both standalone and all-encompassing solutions, Orion is equipping advisors with the resources and support they need to succeed at every stage of their firm’s growth journey.
As the first steps toward increasing flexibility for advisors, Orion began offering its Risk and Compliance Supervision offerings as standalone solutions earlier this year. Later this summer, Orion is adding Trading to its standalone roster to provide advisors an integrated trading and rebalancing solution they can access and leverage alongside their current platform and technology. The standalone Orion Trading solution encompasses a sophisticated portfolio rebalancing engine and an order and execution management system, while offering direct custodian feeds, data reconciliation, and access to the Communities Investment Portal, Due Diligence Hub and Custom Indexing.
By offering Trading as a standalone solution, Orion eliminates many of the challenges large Wealth Advisory firms and RIAs can face when attempting to comprehensively transition everything to a new platform solution; this flexible approach enables firms to seamlessly integrate new technology and processes as their needs evolve and at their own pace.
Savvy Wealth
Savvy Advisors, a registered investment advisor affiliated with Savvy Wealth, announced that four new wealth managers have joined the firm. With a growing presence across the U.S., Savvy now employs 24 financial advisors who collectively manage more than $600 million in assets under management (AUM). Specializing in technology-driven wealth management, Savvy arms its wealth managers with a purpose-built, fully integrated platform to deliver a more seamless client experience
The four new wealth managers can now use Savvy’s all-in-one, artificial intelligence (AI)-powered platform to serve the holistic financial needs of high-net-worth clients. Savvy Wealth’s technology automates and streamlines processes like new account onboarding, ongoing financial planning and personalized communications across multiple marketing channels. The firm’s technology stack also includes an in-house investment management program, Savvy Wealth Investment Management, and a proprietary direct indexing solution.
Wealthbox
Wealthbox announced a new firmwide CRM agreement with Professional Wealth Advisors, an independent wealth management firm with locations in Illinois, Kentucky, and Wisconsin.
Professional Wealth Advisors recognizes the importance of an enterprise-grade CRM solution that aligns seamlessly with the firm’s sophisticated needs. Wealthbox’s intuitive interface, advanced features and integrations, and enterprise configurability will allow the Professional Wealth Advisors team to manage client relationships, collaborate as a team, and drive growth. This partnership reflects Professional Wealth Advisors’ commitment to embracing modern technology and will make Wealthbox available to all 58 financial professionals at the firm.
