Half of the wealthy support a hybrid AI approach

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round 50% of mass affluent and high net worth individuals (HNWIs) have stated they would be comfortable with a hybrid wealth management service supported by AI.

This is according to research from Avaloq that also found that almost 30% of wealth management clients are considering switching their financial advisers.

Surveying more than 1,400 mass affluent and HNW clients across ten countries, high fees and poor performance were the top reasons for switching.

Furthermore, 43% said they would switch because their needs were not being considered and 42% stated it was due to infrequent communication.

With regards to AI, 26% of respondents with a financial adviser would be happy for an AI-only service to make product recommendations based on behaviours or changes in their situation. 26% would also be find for an AI-only platform to answer portfolio questions.

In addition, between 47% and 56% of respondents with and without a financial adviser said they would prefer a hybrid AI approach when it comes to the management of their personal details.

John Wilson, managing director UK at Avaloq, said: “AI is already playing a growing role in the delivery of personalised and more efficient wealth management services, driving revenue growth and client engagement levels higher for financial institutions. We believe that a hybrid approach is most likely to become the future standard model. The benefits include greater operational efficiency and a seamless, real-time client experience.

“The challenge for financial institutions is that, in this highly digitalised time, client loyalty is under increasing pressure. Given the increasingly competitive market environment, wealth managers need to deliver a highly personalised client experience to remain relevant. The answer is a hybrid model that blends automation and digital availability with face-to-face advisory. AI will not replace front office staff such as financial advisors, but it will help them to provide a richer service while also meeting key business demands, such as scalability and efficiency.”