A familiar face helped kick off the last day of the Strategic Leadership Forum: CNBC Anchor Tyler Mathisen, a long-time moderator of Nicsa's Face the Membership session.
The journalist's fireside chat with top leaders from the asset management industry centered on the pressing issues of 2023, from how technology will continue to shape financial services to ESG investing and DEI. The conversation opened with a discussion of the impact of artificial intelligence (AI) on financial services — and what firms should do about it.
Lena Haas, Head of Wealth Management Advice and Solutions at Edward Jones, cautioned against human replacement theories when discussing AI. "It's not about AI versus humans," she said. "Humans armed with AI will win the day by serving our clients differently and better. For us, the question is how to use technology to deeply understand our clients and develop truly personalized plans and products."
Michael Lane, Head of iShares U.S. Wealth Advisory, BlackRock, agreed that AI holds tremendous potential when it comes to personalization, citing model rebalancing as evidence.
"People might want to know what happened in the investment world that would result in a rebalance from one asset class to another," he said. "With today's technology, you don't need 50 people sitting in a room analyzing and writing up that information. Instead, you can enter a few inputs into a database, and it'll spit back the implications of those trades."
When asked how AI will affect client experiences with Edward Jones, Haas said the benefits will be found in allowing for more creative, high-value activities as well as data-driven decision-making and personalization.
"We want our financial advisors to provide what clients are craving, and what they're craving is not just the well-allocated portfolio of the past," she said. "We did a recent study that showed there are four things that matter the most to human beings: Their family and friends, purpose in life, health and wellness, and finances."
Haas said finances serve as a foundation for — and an enabler of — the other three life elements that respondents said matter, "giving people the ability to spend time with their kids, leave a legacy, influence communities, etc." With the help of AI, financial advisors will be better able to focus not on creating personalized solutions for an account, but for a whole person and their family, across generations.
When asked to describe what personalization means to Capital Group, Riley Etheridge, President of the Wealth Management Client Group at the financial services company, said the term denotes whether a client is being served in a way that is relevant to their specific circumstances.
"That can be achieved with technology-supported services, like transitioning from any existing portfolio into one of our models in a way that recognizes what you actually hold, your personal tax bracket, and the amount of tax you're willing to pay in a year — and then make that transition in a way that's personal to you," he said.
Lane likened the distinction between personalization and customization to modifying a car.
"I can customize a car by changing the exterior color, changing the interior, or putting different brakes on it," he said. "Personalization is like having a seat 100% molded to your body that nobody else is going to fit in."
Delivering a personalized experience according to ESG factors is part of that approach in many cases — and DEI is part of the equation. Etheridge said Capital Group offers a transparent account of the company's efforts in that area.
"We share the progress we've made on four different diversity metrics on our website, as well as our goals for 2025," he said. "Many times, clients want to invest with firms that they know are making progress on building the workforce for the future, and I think that's a rational selection criteria."
For a full replay of this session, registered members can visit Nicsa’s 2023 Strategic Leadership Forum website.
Personal views and observations of individuals contained herein are as of the date of the live event or written material and do not necessarily reflect the views of Nicsa or its member organizations. May contain forward-looking statements subject to various uncertainties. Nothing herein is intended to be or should be construed as legal advice. Contact your own counsel in order to obtain legal advice regarding these or any other matters. The information contained herein is for informational purposes only and does not constitute a recommendation of best practices.
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