AI and Wealth Advice: How Will AI Improve The Future of Investing?
Artificial intelligence (AI) is quickly becoming an important part of managing money. Robo-advisors already use technology to make investment decisions, and advanced AI analytics help managers make quicker and smarter choices. At Sevey Wealth, we believe AI is a helpful tool—not to replace human advisors but to support them in providing better, personalized advice.
One important question we’re exploring is whether AI can truly understand a client’s feelings and behaviors about money. Investing is not just about numbers; emotions like fear, confidence, hope, and regret play a big role. It remains uncertain whether an algorithm can truly grasp these emotions and reliably adjust its advice accordingly.
Imagine a client who recently retired and is now shifting from growing their savings to relying on those savings for daily expenses. Their appetite for risk may decrease sharply because they no longer want to risk having to return to work. How effectively can AI recognize and adapt to this significant emotional and financial shift? Clients’ attitudes toward risk and their financial goals change a lot during this period. How well can AI adjust to these new priorities? AI systems will need to continuously update and change strategies to manage risks and taxes in ways that fit each client’s changing needs.
Trust is also very important. When it comes to your life savings, most people want comfort and understanding, which humans provide best. AI can analyze huge amounts of data and make recommendations, but will clients fully trust a computer with their entire financial future? Our experience at Sevey Wealth shows that clients appreciate technology’s speed and accuracy but still want a human advisor to confirm important financial decisions.
Other concerns, such as privacy, data security, ease of use, education about AI, and ethical considerations, could significantly influence AI's success in wealth management and client trust.
Practical examples of AI in action include analyzing and summarizing companies' balance sheets. AI can quickly compare multiple companies at once, helping analysts make informed investment choices more efficiently.
AI is also increasingly used to handle back-office tasks like data entry, report generation, and routine compliance checks. This can reduce investment management costs. Ideally, these savings should benefit clients directly, but I fear some firms will likely keep them as extra profit.
Ultimately, we believe the future isn't about choosing humans or AI—it’s about combining both. By blending AI’s analytical strengths with human experience, empathy, and judgment, we can deliver personalized financial strategies tailored precisely to each client’s goals.
Note: No AI advisors were harmed in the making of this blog post—though one did help write it.
