Finance in Focus: Cognitive technology for Financial Advisors

Finance in Focus: Cognitive technology for Financial Advisors


The wealth management industry has been slow to adopt technologies such as predictive analytics and cognitive computing. The problem comes from a belief that ultrahigh-net-worth clients need one-on-one contact with their advisors. However, technology can actually fill the gap this belief creates and foster highly personalized experiences between advisors and clients. The industry is starting to evolve technologically as executives, firms, managers and even high-net-worth clients are demanding it.

Advisors have a need for stepping up their technology game. Wealth management executives want technology to empower their advisors and deliver enhanced customer experience and improved personalization, but some well-seasoned wealth management advisors are avoiding technology adoption. And yet, next-generation wealth management advisors who anticipate a massive transfer of wealth know that the way to attract top talent is to be empowered with the right tools, enabling them to do their jobs effectively and successfully meet client needs.

Technological dashboards, for example, can be used as a recruiting tool to find clients in an extremely competitive environment. Clients expect their wealth managers to possess the tool, technology and digital capabilities along with the knowledge to use them effectively for delivering a personalized, customized experience that is relevant to their needs and goes beyond the standard investment allocation.

How robo-advisors fit inFinance in Focus: Cognitive technology for Financial Advisors

Robo-advisors are not expected to disrupt good wealth managers. Instead, they can serve to attract a younger generation of clients and planners into the investment space. As this generation becomes more experienced, they might need a dedicated wealth management advisor for more complex needs. Many wealth management firms are building the robo-advisors to compel investors to come in.

As a technology tool that can remove the routine, repetitive aspects of the wealth manager’s job, robo-advisors can free wealth managers to spend more time in relationship building. Clients know that a good experience is based on their familiarity with disrupters such as Airbnb, Facebook, Uber and the like; and they’ll demand that same kind of experience from their wealth management advisor. Advisors that can’t offer that level of personalization and really get to know their clients are sure to miss out. Analytics and cognitive capabilities offer the means to differentiate an average wealth manager from an exceptional wealth manager who has the ability to build strong relationships and attain client business.

Why a cognitive approach complements wealth management

Much information today sits in organizations completely untapped. Where do you pull in this information? Do you need to go through external sources? The reality is that this data is available within wealth management firms, but wealth managers haven’t been able to take that data and create actionable insights. They are looking for that enablement and empowerment to help them establish strong relationships with their clients.

Consider that 43% of all advisors in the US are over the age of 55 years which means a significant number are at or nearing the twilight of their careers. Next-generation wealth management advisors therefore need to be recruited. Cognitive capabilities can bring them up to speed more quickly by enabling them to learn from those advisors who came before them.

IBM Client Insight for Wealth Management can take a wealth management advisor to the next level of hyper-personalization and really scale expertise. It enables wealth management advisors to predict client attrition, understand which products and solutions clients prefer, segment clients beyond the assets they have and their ages, and even draw insight from client behavior.

The relationship between clients and wealth managers is not going away because of digital technologies. Further, advanced technology complements this relationship and enables the it to flourish. But how do you bring next-generation advisors on board at the level of seasoned advisors, who have been doing their job for many years? One way to do so is by using cognitive analytical technology to augment their skill sets.

Where wealth management is going

Younger clients are not satisfied with using robo-advisors solely. They want a personal relationship and demand the high-end technology and digital capability with which they are familiar in other aspects of their lives. Mobile computing, for example, is critical to this segment going forward.

The hallmark of wealth management—one size fits all: one offering, one service level and one entry point—is fading away. The opportunity to deliver different types of user experiences, different entry points and customizable experiences is on the rise. And opportunities for advisors are now ripe for spending more time educating clients and building aspects of the relationship that cannot be automated. Cognitive computing helps create a contextual experience. The technology is only getting better, and is expected to continue to augment the skills of wealth management advisors. The time has come for wealth management to rise above the perception of being a laggard industry.


Alex Baghdjian is a senior offering associate for financial markets and wealth management at IBM. Baghdjian brings deep knowledge of the financial services industry, particularly financial markets and wealth management. His professional experience revolves around digital wealth management, securities-based lending, mortgage processes, account opening and client segmentation strategy. In his role as a senior offering associate at IBM, he focuses on bringing IBM cognitive and analytics solutions to the financial services industry. Follow Alex on Twitter @AlexBaghdjian.

April J. Rudin is founder and president of The Rudin Group and an acclaimed financial services and wealth management marketing strategist. In addition to being a digital and traditional media expert, Rudin is noted for her ability to forecast, analyze and illuminate critical trends in the industry, which allows her to create campaigns that enhance brand and professional visibility. The Rudin Group, founded in 2008, designs bespoke marketing campaigns for some of the world’s most important wealth management and family office firms, focusing on digital strategy and multigenerational marketing. Follow April on Twitter @TheRudinGroup.

Bill Sullivan is global head #FinancialServices market intelligence @Capgemini. Sullivan has nearly two decades of a proven track record leading multicultural teams in the Asia Pacific, Europe and US regions and has successfully run his own startup for three years. His extensive experience includes enabling an approximate 2.5 billion–euro financial services consulting business through insightful and actionable market intelligence, customized primary research and world-class thought leadership. He is a fintech influencer, an executive strategy consultant, researcher and thought leader in global financial services. Follow Bill on Twitter @WFSULLIVAN3.

IBM Client Insight for Wealth Management is a prebuilt, predictive analytics solution for the wealth management industry that delivers advanced behavior-based client segmentation to financial advisors leveraging new-era analytics and cognitive computing. It creates a comprehensive view of the client by integrating multiple data sources inside the organization and delivers actionable insights to financial advisors that helps them enhance service for their clients. Watch a demo to see what it can do for your business, and don’t miss other episodes in this Finance in Focus series.