"Your typical advisors are not a big fan of change and sometimes are slow to adopt or embrace [new technology]. But there was a natural curiosity around this partnership to see what this technology can do," said Greg Beltzer, head of technology for RBC Wealth Management-U.S.
The first phase of testing for the pilot between RBC Wealth Management and the AI-powered wealth management platform TIFIN AG began in August of last year, when 60 advisors were selected to see how the model performed and help design the programs.
The process begins by creating what RBC would categorize as an "ideal client profile" to help TIFIN AG's algorithm recognize current clients that match the benchmark. Part of that identification involves detecting if a client has money-in-motion or has experienced a significant financial event like an inheritance and whether those funds are stored or likely to be consolidated in the near future.
Profiles built using datasets of demographics like age, income level and inflows and outflows of capital combine with performance metrics of client portfolios to continually train the AI-Powered Insights tool. Once deployed, the product is integrated into RBC Wealth Management's advisor desktop platform supported by Salesforce.
Insights generated by TIFIN AG's algorithms help generate leads on customers who recently went through a financial event, in addition to improving the organization of client outreach.
"This [tool] is designed to make it easier on the advisor and give them some prioritization on how they should call their clients," Beltzer said. The company officially debuted the tool across all 2,200 advisors in its network in February.
Amid the unrest of last year's banking crisis, RBC Wealth Management snagged
JPMorgan Chase and Bank of America's Merrill Lynch are among the financial institutions that upgraded their wealthtech in 2023. Some saw an opportunity to provide wealth management to people scrambling for a place to put large deposits in the wake of the March bank failures.
Late last year, the $6.8 billion-asset
Lisa Asher, strategic advisor for Datos Insights, said that while advances in technology and the availability of financial education have brought wealth management firms and consumers together, market factors like inflation still keep many apart.
"In practice, as we see more consumers struggling with inflation, low wages, high home prices, student loans and the skyrocketing cost of childcare, the accessibility may not matter if consumers aren't able to save and invest for the future," Asher said.
Building trust with consumers can become more complicated with the addition of digital products.
"Advisors create trust through a human-centered process of risk management, portfolio management, financial planning and advice. It is a process that ultimately delivers investor peace-of-mind and one that is impossible to replicate solely through digital means," said Greg O'Gara, lead analyst in Javelin Strategy & Research's wealth management.
As regulators continue to figure out how to regulate the burgeoning industry, many banks await clear rules as they adopt AI tools.
RBC Wealth Management will continue to fine-tune the models as use cases continue to evolve.
"We really believe that AI is an enhancer to wealth management and not a replacement for financial advisors," said Jeff Koeneman, chief experience officer for TIFIN AG.
