This has heightened the need for wealth management firms to embrace technology, including artificial intelligence, to arm their advisors with data and tools that will improve the quality of advice and how it is delivered. And yet when it comes to exploring AI to help advisors onboard new clients and provide more relevant advice to existing ones, most firms are stuck in low gear, with few putting the technology at the core of their business. Indeed, less than one-third of the wealth managers we surveyed are scaling AI across their businesses. Part of the problem is getting buy-in and engagement from financial advisors who need convincing that insights created by AI will be actionable in their day-to-day roles. In some instances, recommendations provided by AI don't match clients' immediate needs or stages of life.

While the customer needs change in the wealth management sector, the adoption of digital technologies has remained slow. A new generation of customers are now joining the market, and their needs are influenced by new technologies. Wealth managers need to provide faster and more convenient services with a digital experience in a more volatile and uncertain environment created by the Covid-19 pandemic. McKinsey states that wealth management firms can not overcome these challenges without digital transformation. This article explores 4 key digital technologies transforming the wealth management sector.

The UK's wealth management sector has experienced significant growth in recent years and handles around £948bn of assets, equivalent to about 46% of the UK GDP. As such a vast industry, it's not surprising that financial institutions and wealth management firms are looking to be early adopters of the latest AI technologies. Wealth management is a data-rich industry that has traditionally relied heavily on human data rekeying processes. Many thousands of person-hours are devoted annually at these firms to repetitive, mundane data inputting tasks and simple data interrogation and cleansing. Data can be about clients or markets and using the two sources intelligently is a principle of the wealth management business model.

Derek Bruton has held leadership roles across major custodial firms and independent broker-dealers, including Charles Schwab, TD Ameritrade and LPL Financial, but he didn't start out in wealth management. The Stanford graduate from the class of 1989 played professional basketball in Japan his first few years after school, after playing on his college basketball team for four years on an athletic scholarship. "I recall two things about my first game, in Hokkaido, which is the northern-most Japanese island" he said. "The gym was ice cold, and when I was warming up there was steam coming off of everyone's body." Bruton, who now serves as CEO of Kingswood US, a hybrid RIA and broker-dealer with over $2.1 billion in assets, sees parallels between his basketball stint in a foreign country learning the ropes in real time on how to best integrate with his teammates and the complexities of aligning the right wealthtech for financial advisors.

There are expected to be 7.7 million more high-net-worth-individuals (HNWIs) in the world by 2023, according to a report by wealth data business, Wealth-X. This equates to $20.9trn of newly created wealth in the next five years, presenting a huge growth opportunity for the global wealth management industry. As such, we've decided to compile a short list of interesting statistics on the global wealth management industry – taking into account the current state of the industry, future growth prospects and what HNWIs expect from their advisors. We also take a look at how wealth management firms are using technology, and how they plan to do so in the future, considering aspects such as the use of AI and robo-advisors. The strongest-growing region in 2017 was Asia, which posted a 19% increase.

It's another step in the march toward advice that erodes investors' needs for human help: A robo advisor focused on serving the high-net-worth client, powered by artificial intelligence and designed to automate their specific tax management concerns. Meeting the complicated needs of the wealthy requires a deep knowledge of tax rules and regulations says Hedgeable CEO Mike Kane. "Technology and AI systems can interpret and learn from these rules better than humans can, without our emotional biases." Doubling down on its embrace of Asian themes, Hedgeable's newest offering in its robo platform is a feature called'Tax Samurai,' run by an AI bot called'Katana.' For 30 basis points, it will work for client accounts with a minimum of $1 million to analyze their securities, aggregate all of their financial data, create tax efficient transfers, apply automated downside protection on any current holdings, and perform tax efficient trading and tax-loss harvesting.

Much has changed in the wealth management industry since robo-advisors first made their appearance a decade ago. Talk of disrupting the advisor-client relationship has given way to a new generation of innovative technology solutions that enhance and augment the fundamental ways that investors invest and advisors advise. Today, robo-advisors can be seen as part of a broader movement to digitize wealth management, embodied in the term: WealthTech. Technology derived from wealth management firms, research tools that generate investment solutions, and platforms to support financial advisors -- all fall under WealthTech. Finance is becoming a technology play.

Robo-advisory services are often associated with millennials. This makes sense since these services' client base skews younger than that of traditional wealth management firms. Wealthfront, for instance, has previously reported that 60% of its customers are younger than 35, while Betterment has said that 75% of its customers are under the age of 50. Robo-advisers also offer features that millennials prefer: simple and transparent fee structures, an intuitive digital user experience, and personalization based on the user's appetite for risk. Plus, today's robo-advisers are aggressively positioning themselves as the millennials' answer to traditional, stodgy wealth management firms, as evidenced by their marketing campaigns.

The robots are rolling forward with a full-frontal assault to capture Wall Street's vast investment fees and commissions. More investors are warming to the cold, steely embrace of the increasingly sophisticated, low-cost automated robo-advisers. The primary reason is to save money on those fees and charges. Bots are squeezing their flesh-and-blood competition and threatening the jobs of thousands of human brokers in the $20 trillion US wealth management business. Nearly one in three investors says these machines are superior at picking stocks and lessen their risk, and almost as many say the machines are better at selecting investments for retirement than human brokers, according to a new study of US investors by market research and consulting firm Spectrem Group.

Robo-advisors, which use artificial intelligence to make investment decisions for clients, are potential competition for many flesh-and-blood financial advisors. But other types of AI might soon become advisors' best friends, writes Financial Advisor IQ. Banks are leading the AI trend, but wealth management firms, too, can benefit from incorporating the technology, particularly when it comes to automating mundane tasks that can be performed as well--or better--by an automated system. The idea is not to replace advisors or advisory staff with technology, but to use technology to free people to perform higher-value functions. Thirty-two percent of companies in the financial-services space are using AI for predictive analytics, voice recognition and response and recommendations, Financial Advisor IQ reports, citing a study by the National Business Research Institute and Narrative Science.