AI providing a 'competitive edge' for HNW advisers

According to a report from Praemium developed in conjunction with CoreData, high-net-worth (HNW) advisers are utilising AI technology to assist them in serving clients with complex needs that require sophisticated tools in order to deliver “high-quality, personalised service”.

To this end, HNW advisers are using AI technologies, such as natural language processing (NLP) and machine learning, to help them analyse large datasets and anticipate market changes, proactively ensuring their clients’ portfolios are aligned to their needs.

The AI & Integration report noted a strong correlation between high levels of digital integration within an advice firm, strong growth intentions, and an increased likelihood of a firm adopting AI technology.

While the findings showed that 27 per cent of advisers overall exhibited a high level of digital integration, HNW advisers in particular were more likely to fall into this bracket, with 33 per cent doing so compared with just 21 per cent of general advisers.

Similarly, advisers operating in the HNW space were more inclined to have strong road-mapped plans for growth than their non-HNW counterparts, at 27 per cent and 21 per cent, respectively.

Moreover, 65 per cent of firms with strong growth intentions have already integrated AI into their business or advice process in some capacity, and a particularly enthusiastic 1 per cent have fully integrated the technology.

Speaking on the findings, Praemium general manager distribution, private wealth, Matt Walsh, suggested that AI technology is crucial to firms achieving new heights of efficiency.

“These statistics illustrate that for HNW-focused firms, technology is not an optional enhancement—it is a strategic imperative central to their future success,” Walsh said.

“According to the research, 89 per cent of advisers report increased business efficiency as the primary benefit of AI adoption, while firms leveraging these tools have seen a 35 per cent reduction in time spent on administrative tasks​.”

The primary driver behind these high-tech, high-growth businesses adopting AI, as noted by the report, is the potential to gain a competitive edge by improving the overall quality and efficiency of the business.

“Within this space, advisers identified AI as a potential game-changer, suggesting the ability to integrate AI technologies into their back office and existing software stacks could be key to delivering greater efficiency and enhanced digital interactions with clients,” Praemium said.

Chief strategy officer Denis Orrock explained that, as demand for advisers’ services continues to increase, it is the responsibility of platform providers to help them meet the demands with utmost efficiency.

“Today the Australian advice industry is dealing with strong demand, an undersupply of advisers, shifting regulation and onerous compliance costs,” Orrock said.

“As the research showed all adviser groups see ‘embracing new technologies for greater efficiency’ as the key response to those challenges and the most important strategy to achieve growth over the next five years.

“Platforms need to be on the front foot to enabling advisers to deliver a high touch service, access to new investment opportunities and to leverage tools to deliver advice more efficiently.”