Advisors looking to build ties with younger affluent investors might want to consider brushing up on their AI skills, according to a new survey.
The poll from Boosted.ai, a generative AI software firm that caters to investment managers, looked into how high-net-worth investors across the US and Canada – those with $100k+ personal income, $300k+ household income, and/or $1 million-plus in liquid investable assets – use and view artificial intelligence.
It revealed that younger HNW individuals are increasingly relying on AI in their personal lives and expect their financial advisors to do the same.
According to the findings, 82 percent of younger HNW respondents describe themselves as proficient in AI, and 56 percent report using the technology regularly. Additionally, 79 percent expressed that they would like their financial advisors to integrate AI tools into their services.
AI usage could be a make-or-break issue for relationships with younger HNW clients. Among those in the survey, 35 percent said they'd consider walking away from their current advisor they weren't already adopting AI. Beyond that, 70 percent of respondents aged 18 to 44 view the use of AI and emerging technologies as essential for financial advisors.
“Gen Z and Millennials understand the transformational nature of AI and how it will impact their lives, including their finances," Joshua Pantony, CEO of Boosted.ai said in a statement. "They’re becoming more comfortable using it, and clearly expect the people they trust with their investments to leverage the technology as well.”
With an $84 trillion wealth tsunami from Baby Boomers to younger generations set to take place over the coming decades, Pantony argued that advisors must evolve their approach to meet the needs of a more tech-savvy clientele.
While the survey highlights a growing enthusiasm for AI among younger investors, it also reveals concerns about the technology. Issues such as personal data security (68 percent), lack of regulation (67 percent), and hacking (62 percent) were cited as primary concerns across all age groups.
The results also revealed a schism in AI trust across age groups, with only 30 percent of those aged 65-74 expressing trust in AI, compared to 63 percent of younger respondents.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.