2024 Trends & Predictions: Digital Wealth — Advisor

Artificial intelligence is reshaping modern wealth management. It fosters client engagement while driving efficiency across the advisory workflow, from onboarding to portfolio construction and risk management. 

As AI further penetrates the CRM and other core systems, service homogeneity will succumb to hyper-personalization. Prospecting and segmentation will become more focused. Enhanced client profiling capabilities will boost the advisor value proposition, while customized client communications will create opportunities for cross-sales and fraud prevention. Dynamic digital interfaces and intelligent risk models will help advisors convey value in the face of pricing and regulatory scrutiny. 

Coherent messaging and compelling service delivery will also offer advisors a respite from fee compression. Asset-based pricing remains prevalent, but fee-for-service models have gained traction. Monthly subscription models, tiered asset-based rates, and hourly charges tend to resonate with younger investors. They also align well with financial-planning-based delivery models. Innovative advisors are embracing these fee structures as they expand into new areas such as tax and estate planning.

Tax management is no longer an afterthought but a strategic starting point for advisors. Incorporating tax and audit capabilities allows large firms to serve multi-generational clients. Smaller advisors are bundling innovative tax tools into their financial planning systems. Dynamically connecting income to investments allows advisors to help clients identify tax credits and deductions and optimize withholdings. Tax planning is transformed from a back-office function into a front-office client engagement driver.