Artificial intelligence (AI) has quickly become one of the most transformative forces in financial services and wealth advisory. At the recent Addepar Summit, we led an interactive panel discussion on the rapidly evolving landscape of AI. 

AI adoption in financial services: hype vs. value 

A recurring theme the panel touched on was the tension between AI experimentation and implementation at scale, noting that many organizations struggle to balance innovation with the necessary security and governance. AI tools can quickly enhance efficiency across teams but one panelist mentioned a recent Harvard Business School study of note. Conducted in collaboration with Boston Consulting Group (BCG), the study explored how AI impacts consultants' productivity and performance.1 In the study, higher-performing consultants improved their performance by 17%, while those with initially lower performance saw a more significant improvement of 43-47%.

The key value of AI expressed repeatedly was its ability to free up time for strategic decision-making, allowing professionals to focus on high-impact work. 

Panelists agreed that AI is particularly effective for automating repetitive tasks, such as responding to RFPs and due diligence questionnaires. Other use cases mentioned include chatbots, coding co-pilots and content creation. The key value of AI expressed repeatedly was its ability to free up time for strategic decision-making, allowing professionals to focus on high-impact work. At the same time, there’s a growing emphasis on maintaining discipline in data security and governance — a sentiment echoed by the panelists.

Navigating AI’s impact on the workforce 

One of the more thought-provoking discussions revolved around AI’s impact on jobs. Panelists highlighted that while AI has the potential to displace roles, it also creates opportunities for augmentation. The ideal scenario, according to firm executives, is a combination of domain expertise plus AI — where experienced advisors and investment managers use AI tools to amplify their impact. More junior employees can also leverage AI tools to gain efficiencies and flatten the learning curve. The panelists stressed that the ability to build strong client relationships and having good instincts — qualities that are uniquely human — will remain indispensable in financial advisory.

The ideal scenario, according to firm executives, is a combination of domain expertise plus AI — where experienced advisors and investment managers use AI tools to amplify their impact. 

Security, governance and threat management in AI 

At the Summit, we delved into the critical topic of security and governance in AI and the discipline required to manage it. In terms of practical advice, the panel recommended keeping a close eye on where data resides, particularly PII, and ensuring rigorous controls over access to first-party and third-party data sources. The conversation also expanded to AI’s role in growing cybersecurity businesses, including startups specializing in pattern recognition for threat detection.

Preparing for the future with AI 

As AI capabilities evolve, companies must balance scale and innovation with security and governance. The key takeaway from the Addepar Summit? AI is most powerful when it augments human expertise, enabling investment professionals to work smarter, not harder — and be far more strategic in their day-to-day. With the right mix of governance, flexibility and human collaboration, AI is set to drive the next wave of innovation in wealth management.

Reference:

  1. Harvard Business School Partners with BCG on AI Productivity Study, The Harvard Crimson, October 13, 2023.