Advisors know that with many clients, the former isn’t custodying every red cent of the latter’s money. In many cases, clients have investment accounts, be they employer-sponsored plans or discretionary trading accounts, that are not under the advisor’s purview.
That’s to be expected, particularly among high-net-worth customers, many of whom have the resources to invest/trade on their own and the aptitude or curiosity to do so. Advisors have to tread carefully regarding assets clients keep separate, but some gentle prodding can be productive because data confirm many clients – even the wealthy ones – are getting advice from artificial intelligence (AI).
Consider the findings in a recent HSBC survey** of approximately 10,000 affluent investors hailing from **China, Hong Kong, India, Malaysia, Mexico, Singapore, Taiwan, the United Arab Emirates, the U.K. and the U.S. Folks in the wealthy client cohort don’t just occasionally AI for trading tips or investing advice. Their relationship with the technology runs deeper.
So much so that 73% for investment advice and education, outpacing the 62% that tap AI for career wisdom and the 60% that use it for personal development.
For the Wealthy, AI Isn’t an Advisor Replacement
As has been widely documented, clients like AI for various functions, investing and otherwise, but they don’t view the technology as an adequate replacement for advisors. As is so often said, clients, including those in the high-net-worth camp, still want the human touch.
“When asked where their last investment idea came from, 62% cited financial professionals and institutions, compared with 32% who cited AI,” notes HSBC. “That gap widens at the point of commitment, with 37% citing financial professionals and institutions as the most influential factor in their last investment decision – three times more than AI (12%).”
Said another way, when push comes to shove and it’s time to hit the “buy” button,” well-heeled clients are more likely to follow the advice dispensed by pros, not what they drum up on ChatGPT or Claude. The point is human insight matters, even for wealthy and technologically inclined clients.
“As investors approach the final decision, they turn to professional advisers for the human inputs that shape outcomes and accountability: 80% cite reassurance and 72% cite strategic expertise,” adds HSBC. “The most valued adviser contributions include applying judgement and validation (32%), spotting mistakes in AI-generated data (29%) and providing a personalised interpretation of complex data (28%). Investors primarily use AI for analysis and research (66%), strategy support (50%), and to provide a second opinion on their ideas (31%).”
Demographic Considerations
Not surprisingly, the intersection of AI usage for investing purposes skews along demographic lines, meaning Gen Z and millennials are more apt to tap technology for investing advice than are boomers.
That doesn’t man younger investors aren’t inclined to work with advisors. They are, particularly as they accumulate age and wealth. For advisors, it’s worth noting exactly why the youngsters are using AI because it’s actually good news for the wealth management industry. Hint: They’re not going to AI for estate planning or tax strategies.
“Gen Z mostly use AI to identify potential risks and avoid mistakes (41%), while Millennials most often use it to improve the speed of research and analysis (39%). Gen X primarily use AI to improve the speed and efficiency of research (29%), and Baby Boomers mainly use it to identify potential risks and avoid mistakes (27%),” concludes HSBC.
