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The Pursuit Of AI-Driven Wealth Management – Wealth Tech Digest #46

Key takeaways

✅ The Pursuit Of AI-Driven Wealth Management

Our first digest deals with the biggest buzz terms in tech today, artificial intelligence, and how it is already disrupting wealth management. Understanding the application of AI to business requires an understanding of context  — strategy, customers, company culture, and so forth. Thomas Davenport and Randy Bean of MIT Sloan have studied AI’s use-cases in wealth management and have interviewed analytics and AI officers at several companies. Unsurprisingly, they found that almost all organizations that offer AI-generated robo-advice combine it with human adviser consultations. That seems to be a feature, not a bug, as it has enabled firms like Wealthfront to lower their fees to 0.25% compared to the standard 1% of human-only advising. On the contrary to this AI-heavy strategy is that of  Vanguard, which uses a robo-advice platform called Personal Advisor Services (PAS). Even though PAS does use some AI, it relies mostly on traditional arithmetic for its risk assessments and other quantifiers. The greatest use of AI among finance firms, however, has to be that of Morgan Stanley’s Wealth Management Unit. For over 10 years, Morgan Stanley has been working on its Next Best Action system to provide its financial advisers with insights to present to clients. This system, as you can expect, uses a whole lot of machine learning to identify investments of interest and relevance to a particular client. AI may be a great tool, but at least for now, it cannot yet manage client portfolios that include alternative investments like art and commodities.

✅ Conquest Eyes Continued Expansion With $7.5 Million Funding Round

For our next digest — good news for Conquest Planning as it receives a resounding vote of confidence with additional funding from existing investors. Just less than 18 months after raising $3 million in a seed funding round, Conquest Planning has received a fresh injection of capital. This latest round of funding comes as it tries to build on its early success within Canada. Portage Ventures, Fidelity International Strategic Ventures, and IGM Financial are making repeat investments in Conquest to the tune of $7.5 million. Conquest CEO Mark Evans expresses his excitement for the strong and resounding support from some very reputable venture capital firms. Beyond just funding, Evans said Conquest benefits from each of its investor partners in substantial ways. With Fidelity, the company can leverage its position in the UK while Portage can open the doors for strong local and global relationships and exposure. With its innovative use of artificial intelligence, Conquest offers a financial planning software solution to help advisors and consumers. The software can be adapted to support consumer-initiate digital planning or digital co-planning activities with an advisor. Since October 2020, Conquest has inked key partnerships with Canadian wealth industry leaders including IG Wealth Management and Canada Life. We look forward to following the company’s efforts to widen its offerings and expand to different markets.

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