Leveraging AI in the ultra-high net worth and family office segment

How can artificial intelligence best be used in a segment that demands a white glove personalised service?

Talk of the potential of artificial intelligence (AI) is rapidly turning into everyday reality with real-life use cases now common. Indeed, it is already being commonly used within the retail and mass affluent segments to up self-service and provide help through AI-powered chatbots.

But will this work higher up the scale into the ultra-high net worth (UHNW) and family office segment where wealth owners do not want to see the technology, but rather, just feel the benefits and continue to receive a white glove personal service they expect?

The answer is yes. Here the role of AI is to enhance the service and provide robust behind-the-scenes automation and efficiency to boost and enhance the personal touch.

There is a delicate balance to be found between leveraging technology and maintaining a high-touch, personalised service.

“In a space that is traditionally driven by high-touch face-to-face interactions, leveraging digitalisation and AI to deepen engagement and continue to enable wealth managers to offer a deep and customised value proposition to clients at scale is key,” says a spokesperson for DBS Bank in Singapore.

Efficiency gains

The obvious use in this segment is by improving efficiency and automation, using AI to provide advanced portfolio analysis and risk management, streamlined data input, aggregation, reporting and visualisation, and predictive analytics for estate and tax planning.

For family offices, the best use of technology is delivering on a need, or a gap, or solving a problem, says Hugo King-Oakley, head of private markets and community at Global Partnership Family Offices (GPFO), a European-centred family office network.

“If the cost of delivering and running the family office can be reduced that is also valuable,” he says. For example, if it takes a lot of time to input data from PDFs of legal letters and reports, then could the process be automated using data extraction tools?

The multi-family office model has more to gain from scale efficiencies afforded by AI but single-family offices, working for a smaller group of beneficiaries, can make use of AI too, adds Mr King-Oakley, for the good of not just the beneficiaries but family office professionals too.

Personalisation

Efficiency and automation are an important end in themselves but take on more value when they contribute to an enhanced service proposition. Indeed, the whole point of the family office is to tailor towards individual needs and solve often unique and complex situations. UHNWIs are not far behind in that respect.

“AI’s true value lies in its ability to assist and support the adviser in a sidekick or co-pilot role. Think how a legal assistant supports a lawyer – carries out research, organises the agenda, examines case facts, drafts letters, and offers opinions. This is the best approach,” says Luc Haldimann, co-CEO at Unblu, a Swiss software company.

This is something that DBS has worked towards. Its offering has nudges that are based on 16,000 customer attributes that include individual risk profiles, browsing history, investment activity, and portfolio holdings. The aim is to provide curated research and  “actionable insights”, depending on risk profile. This can be on anything from hedge funds and structured products to overseas property financing solutions and estate planning.

“The value lies in being more easily able to deliver tailored reports for family members with different focusses,” states GPFO’s Mr King-Oakley. If a next generation family member is more interested in impact or ESG metrics from their portfolio than deep analytics or absolute performance this can be more easily delivered by the family office using AI, either through report building or providing tailored access, he adds.

Beyond the investment proposition, AI can add value when it comes to compliance and risk management, fraud detection, market sentiment, and client sentiment. It can also help integrate different facets of wealth, such as estate planning and intergenerational wealth transfer strategies.

All of this helps the adviser to fine-tune and further personalise the service.

All in all, AI presents an exciting opportunity to boost the adviser and augment the client experience, as well as provide operational efficiency.

“We need to change how we perceive AI, shifting towards treating it as another colleague on the team,” says Unblu’s Mr Haldiman.

“We set the rules and boundaries and expect it to work within those. This approach leverages the power of the technology as a collaborative force that serves to improve efficiency and enhance the ingenuity, creativity, and dynamism of human potential.”

Dynamic transition

AI can facilitate an even more dynamic transition between an UHNW client’s online and offline interactions, to help them grow their wealth with AI-powered tailored insights and investment recommendations, according to DBS Bank.

To that end, most banks and family offices serving the upper echelons of wealth are selectively adopting technologies that genuinely enhance capabilities without compromising the high-touch, relationship-driven approach. The priority remains to provide exceptional, personalised service to clients.

“The focus needs to be not on the AI itself but rather on the benefits and enhancements that it can add," says Andrea MacDonald, co-founder and chief commercial officer of UK-based wealth management fintech Avenir. “Firms that seamlessly integrate AI into their offerings, without making it the focal point, will lead the way in setting new standards and truly satisfying client needs.”