F2 Strategy’s Executives in Residence bring years of high-level experience to our clients and with that comes unique perspectives and powerful insights that wealth management firms can use to make critical decisions. Our “What I’ve Seen” series gives the executives an outlet to share their insights with the industry in three categories: driving change, marketing and sales, or customer-centric business.
Elena Carroll speaks about positioning wealth management firms for sales growth by using data and artificial intelligence.
There is a lot of excitement around advances in data analytics, automation and artificial intelligence (AI) in the wealth management sector. Best-in-class advisors use insights generated by data analytics to better prioritize next best actions across their client base that will have the biggest impact in growing their business. They can access multiple sources of data to better understand held away assets which may be prime for conversion. They can use these data insights to automatically generate proposals and easily share with clients. Data, analytics and AI can help advisors punch above their weight to drive business growth.
How do RIAs take advantage of these technologies to grow revenues and use their power to scale their operations? There are six steps RIAs can take to get there.
Step 1 – Align your Business and Data Strategies
Before embarking on advancing your data analytics capabilities, review your overall business strategy and determine how a data strategy can better enable you to achieve your strategic objectives. A data strategy should not be developed in a vacuum, so it is critical that it be aligned to your overarching strategic direction.
Step 2 – Assess your Data
One of the biggest challenges in wealth management today is data management. Before you can effectively leverage your data to reach your strategic imperatives and take advantage of artificial intelligence, you need to get a handle on it:
- What data do I have? How accurate and up to date is it?
- Do I have the proper permissions, privacy and security protection to protect personally identifiable information (PII)?
- What data do I still need and how can I get it? What data do I need to access holistic data about my customers to provide better advice to justify my fees?
- Once I bring all this data together, can my firm readily access it, analyze it and turn it into insights to make better decisions for our company and our clients?
- Do I have the proper tech stack to manage my data?
Step 3 – Modernize your Tech Stack
A concerning and somewhat surprising trend we see is that many RIAs are operating their businesses on outdated technology. We regularly see firms use highly customized technology platforms. While this customization may have made sense at the time, it is now a barrier to agility, scale and growth. Your technology providers can’t quickly adapt a highly customized platform to new data analytic features and AI which other firms are leveraging. Your advisors can’t engage their clients and prospects in digital experiences that will grow their business. Your technology and operations teams cannot properly integrate your platform with other capabilities in CRM, reporting and more.
An agile and modern tech stack that can be configured to your needs is table stakes to apply your data to generate the insights needed and get your business running at peak performance.
Step 4 – Revisit your Processes
There is an opportunity to reassess how you operate your day-to-day business, and how your customer journeys align to the internal work done at the firm. What are the biggest pain points in the customer journey? What are the top internal pain points? Where are there bottlenecks? How can the application of data, automation and AI streamline these processes, freeing up advisors to spend more time with clients, and other employees to focus on more important projects?
Step 5 – Unleash Advisor Talent
Advisor turnover has been another challenge for RIAs, so providing them with the right data and technology to help them do their best work is worth considering. Some areas to highlight are:
- Great advances in AI applied to client data which can deliver a daily set of next best actions advisors can take to grow their book of business most effectively and efficiently service a larger client base.
- Exciting capabilities like ChatGPT can do the heavy lifting in writing a proposal or financial plan to increase advisor productivity.
- Data visualization and predictive analytics capabilities are increasingly being built for and integrated within wealth management applications, arming a nontechnical advisor with data insights they can act on.
- Augmented reality can help your advisors better serve a more diverse client base remotely at scale.
- Tools which can analyze data to monitor advisor regulatory compliance that are not overburdening for the advisor.
Step 6 – Optimize the Organization
As data becomes more critical to the success of your business, it is imperative that your organization adapts to this new way of working. Consider hiring or outsourcing to new types of talent. You will likely need data scientists, architects and engineers who can build and operate the data infrastructure you need.
Also consider enabling your nontechnical talent with low code or no code technology which can easily enable a person without a degree in data science to build a model to answer a question or solve a problem.
As you revisit your processes in Step Four, there is likely an opportunity to reassess your operating model, and make sure the organization is optimized with clear roles, accountability, and career pathing. Data and automation capabilities can free up people for higher order work, providing opportunities for skills development and additional career possibilities.
Position Your Firm for a Future with AI
Putting all the hype aside, the wealth management industry will be transformed by advances in artificial intelligence. For your firm to take advantage of that, it is imperative to start with a data strategy tied to your business strategy. Build your data foundation by connecting disparate data across internal and external sources enabled by a modernized tech stack. Uncover opportunities to improve your processes and the way teams operate.
These six steps will position your firm well for the future, enabling the increasingly dynamic advisor to better serve increasingly digital, demanding and diverse customer segments.
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