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Robo Advisors' Ascension In Wealth Management

Banking CIO Outlook | Monday, April 25, 2022

Artificial Intelligence (AI) is being more widely used around the world. Whether it's home smart devices or the Mac's Siri program, artificial intelligence seems to be everywhere. Wealth management and the finance industry are not immune to this trend despite following more traditional paths.

Fremont, CA: Robo advisers are software programs that assist in managing investments without the involvement of a financial advisor. This software automates financial planning services based on an algorithm without requiring much human intervention. This digital wealth management software will only require a web browser or a cloud-based device.

Robotic advisors are the most recent AI integration. While some may be wary of this futuristic approach to money management, these "robots" can potentially change the way you handle your money. More specifically, the millennial age is increasingly employing AI robots to maximize their investment returns and successfully handle various financial needs.

Advisors and wealth managers can expect to create realistic financial plans for their clients while providing exceptional service by implementing this fintech technique. In this post, we'll go over everything you need to know about Robo advisers, including how they function and how they can help your business.

How They Operate:

So, how do these machines function? Typically, the Robo adviser will use online surveys to gather information from clients about their financial condition and their goals and investment interests. Then, based on the properly built algorithm, the software will next generate a selection of appropriate financial alternatives.

This software can provide the following capabilities after completing this online survey:

• Taking advantage of tax losses

• Goal-setting

• Services for Accounts

• Management of a Portfolio

• Investing in Assets Automatically

• Profiles of Investors

• Digital Advice

• Preparing for Retirement

A client's portfolio is also automatically rebalanced whenever the funds are invested in aligning it with the desired target allocation. This tactic has also shown to be a less expensive way to invest.

AI generally raises concerns about robots taking over the world and replacing people's jobs. However, as we grow accustomed to technologies like Siri, Google Home, and Alexa, AI becomes increasingly integrated into our daily lives. Thus, integrating Robo advisers into a wealth management strategy is highly recommended for wealth managers who wish to remain competitive and deliver comprehensive client service.

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