ARTIFICIAL INTELLIGENCE MAY SHAPE THE FUTURE OF WEALTH MANAGEMENT, BUT CLIENTS WANT MORE EMPATHETIC ADVICE
It is hard for clients to open up and talk about something as personal as their money or their financial fears. Without this information, though, Financial Advisors have a difficult challenge differentiating their value from a self-directed technology solution. A machine can easily take the client’s information and then generate a financial plan based on the client’s needs, the economy, and other market knowledge.
However, Financial Advisors are increasingly realizing psychological influences impact the behavior of investors and their market returns (Kent, 2019). The emotional value and empathetic advice that an Advisor can provide is one of the key reasons why behavioral science is such a hot topic in the wealth management industry today. The Financial Advisor needs insights into underlying behavioral biases — for their clients and for themselves — and must communicate them effectively to best serve their clients and demonstrate the value of full-service advice. They must understand how their clients think and feel about money, which is based on their unique experiences and may cause irrational investment decisions.
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