Wealth managers may be ghosting their normie clients and automating the services they currently count on, according to a report from Bloomberg.
The article surfaces a revealing piece of jargon used by Debasish Patnaik, a partner at the consulting firm McKinsey & Company: “mass affluent,” referring to wealth management clients with $1 million or less in liquid assets. If you are mass affluent, I hate to break the news that your wealth manager apparently never actually cared about you, and may no longer be manually compiling those reports about how things are going in your portfolio.
“The mass-affluent client now gets something close to private-banking quality from AI,” Patnaik tells Bloomberg. This, according to Patnaik, changes the picture when it comes to what financial institutions need from prospective wealth managers.
Meanwhile, the “truly rich,” to use Bloomberg’s term, will be getting ever more personalized service as wealth management further bifurcates into automated and ultra premium versions, according to Patnaik. The new services the job will require make a wealth manager sound like a mix between a mob consiglieri and a parent. Firms will need workers with skills like the ability to manage succession events, an understanding of “family dynamics,” the ability to decide “which family member gets to inherit what” for the masters of the universe, and the warmth necessary to “hold their hand,” when the market takes a negative turn.
Since AI can’t do any of this, Patnaik says firms will “weight hiring heavily toward it.”
But your experience as part of the disgusting mass affluent rabble may soon not involve an actual wealth manager at all. Patnaik tells Bloomberg firms will need to hire for roles overseeing automation and AI software: “specialists, behavioral data scientists, personalization architects, and human-in-the-loop oversight professionals.”
Citi is on the cutting edge of this shift, Bloomberg’s story indicates. Joe Bonanno, Citi’s Head of Wealth Intelligence tells Bloomberg that his company is rolling out “AI-backed software” like a chatbot that tells clients how to manage their children’s college funds, and a push-button system that can “draft an email from the chief investment officer and distill what it means for the client.”
Through all this AI, Citi apparently thinks engagement with clients will increase. Bonanno tells Bloomberg “engagement keeps clients happier and stickier.” Speaking personally, I love being happy and sticky.
But none of this may matter according to everyone’s favorite infinite-money-cheat-code-finder Elon Musk, who said in a January interview that because of AI, everything we all know about saving money is about to change. “We’re at the top of the roller coaster, and it’s about to go down,” Musk said on the podcast Moonshots with Peter Diamandis, not being totally clear about whether that’s good or bad. “Don’t worry about squirreling money away for retirement in 10 or 20 years. It won’t matter,” he told Diamandis.
Whatever that means, cool, most of us aren’t successfully saving for retirement anyway. Can’t wait to see what the near future holds for rich and poor alike.
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