AI in wealth management: Practical strategies for client success

Matt Gagnon used to do research like most investment advisors.

He’d spend a couple of hours looking up different indicators, such as data from major stock indexes and fiscal policy trends, compiling insights that would give him a sense of the direction of markets.

Now he uses an AI-powered search engine to aid his research. Gagnon, founder of Financial Empowerment LLC in Plano, Texas, created a prompt to gather all the data points for his market update workflow. 

“It takes about a minute to gather information, which I then download and verify for accuracy,” Gagnon says. “Usually, it does a good job identifying key themes that help me get started. I can then read the underlying sources myself and add my own insights. 

The AI tool doesn’t write the update for him, Gagnon adds. “I’m still heavily involved in making sure I agree with the analysis and that the statistics cited are accurate.”  

Gagnon is among the growing number of wealth management professionals adding AI-powered tools into their daily practice. According to Schwab’s latest Independent Advisor Outlook Study (IAOS), more than half of RIA firms are already using AI, and another third are exploring its potential.

Financial advisors are looking to AI to help enhance client service, streamline operations and deliver more personalized, data-driven advice. Those who have adopted these tools say they can deliver value almost immediately – if a firm knows how to use them.

Personalizing financial planning at scale

One of AI’s greatest strengths is its ability to process and interpret massive amounts of data in seconds. For AI for financial advisors, this means you can create customized financial plans faster and more accurately than ever before.

• Dynamic risk profiling
  AI tools go beyond static questionnaires by assessing client risk tolerance based on behavioral data, spending patterns and real-time market responses.
• Life stage recommendations
  AI-powered software can track client milestones – such as marriage, children, retirement goals – and automatically recommend plan adjustments.
• Scenario modeling
  Using predictive analytics, advisors can run hundreds of “what-if” scenarios instantly, helping clients understand the potential long-term impact of their decisions.

With the right AI tools for financial advisors, you can provide deeply personalized advice for every client, even as your business scales.

Enhancing portfolio management with AI-driven insights

Portfolio management is one of the most time-intensive aspects of wealth advising; however, AI portfolio management tools are streamlining the process and improving outcomes.

• Market trend analysis
  AI algorithms process real-time market data, news sentiment, and historical patterns to identify opportunities and risks more quickly than manual analysis.
• Tax-loss harvesting automation
  Specific AI platforms automatically scan portfolios for tax-loss harvesting opportunities, suggesting trades to improve after-tax returns.
• Risk management alerts
  AI can flag unusual portfolio activity or overexposure to a sector, giving you the chance to take proactive measures before risks escalate.

“AI can make rebalancing recommendations at the individual security level and it can do a risk assessment report on a portfolio, highlighting potential vulnerabilities,” says Will Trout, director of securities and investments at Datos Insights. ”It can also explain portfolio returns, like where a  5% return came from – account reporting is a great use case because it’s tough to get that wrong.”

When you combine human expertise with AI portfolio management software, you deliver sharper insights and more agile decision-making.

Improving client communication and engagement

Your clients don’t just want good results – they want consistent, clear communication. AI client engagement tools are making that easier than ever.

• AI-powered chatbots
  Provide instant answers to basic client questions, freeing up your time for higher-value conversations.
• Content personalization
  AI can recommend targeted articles, reports and videos tailored to a client’s portfolio and interests.
• Predictive engagement
  By analyzing interaction patterns, AI can suggest the optimal times and channels for connecting with clients.

When used strategically, AI client engagement platforms keep your clients informed, reassured and connected – strengthening long-term relationships.

“AI frees up time for every single part of the business, for personal time with clients, being able to focus on their goals and aspirations,” says Michael Casey, president of American Executive Advisors in Alexandria, Virginia. “Every day is a sprint to the finish and being able to pick up another 15 or 20 minutes is huge.”

AI also allows for more frequent and educational client communications, including “personalized investment summaries” and client education, being able to follow up with an intelligent perspective on what purpose a structured product solves or on opportunities specific to health savings accounts,” says Trout.

Streamlining compliance and regulatory tasks

AI can help you stay ahead of regulations while saving valuable time.

• Automated documentation
  Generate compliance reports in real-time, eliminating the need for manual data entry.
• Regulation monitoring
  AI scans legislation and regulatory updates, summarizing the changes most relevant to your practice.
• Fraud detection
  Machine learning models can detect unusual transactions that may signal fraud, protecting your clients’ assets.

“The most widely publicized early use case has been for note-taking, which has a related compliance function, to document advisors’ conversations alignment with their investment policy statement,” says Trout. AI tools can also “help accelerate some onboarding requirements like  KYC (know your client) and AML (anti-money laundering),” adds Trout. 

Elevating marketing and lead gen

The same tools that power AI in client management can also help you grow your book of business.

• Client segmentation
  AI can organize prospects and clients based on financial goals, demographics and behaviors, allowing for highly targeted outreach.
• Predictive lead scoring
  By analyzing engagement and behavior data, AI can identify leads most likely to convert.
• Content optimization
  Natural language processing can evaluate your marketing materials for tone, clarity, and SEO strength.

With AI, your marketing efforts become more precise, saving time and money while attracting the right clients.

One example: using AI to improve your firm’s website. “If you wanted to, you could upload your whole website onto one of these engines and say, ‘Tell me how to improve my website,” says Joel Bruckenstein, president of T3 Technology Tools for Today. “You can give a description of what your value-add is to clients, and then say, here's my website. Does it reflect what I do and what our core values are, as well as they could?”

Supporting behavioral finance coaching

Even the best plan can be undone by emotional decisions. AI helps you act as a behavioral coach by identifying patterns before they negatively impact outcomes.

• Behavior tracking
  AI can detect impulsive trading or deviations from the agreed strategy.
• Sentiment analysis
  AI reviews market sentiment to anticipate client concerns and prepare your response.
• Goal tracking dashboards
  Interactive visuals powered by AI help clients stay committed to their plan.

With behavioral data at your fingertips, you can guide clients toward better long-term results by identifying patterns in their decision-making, recognizing potential pitfalls before they occur and addressing emotional responses that could derail their financial plans.

“AI can do a behavioral profile that gives the advisor a much broader, bigger picture of the client, a much richer profile,” says Trout. “It also allows identification of prospects in a more systematic way that goes beyond just what is known about the client's level of income,” adds Trout. 

Maximizing efficiency with workflow automation

The right AI tools can drastically improve productivity.

• Meeting Prep
  AI gathers relevant client data, market updates and portfolio performance into a single briefing.
• Follow-up automation
  Automatically send meeting summaries, reminders and action steps.
• Task prioritization
  AI ranks daily activities based on urgency, client importance or revenue impact.

More efficiency means more time for what matters most – strategic thinking and client relationships.

“We’ve been using Jump AI for the last six months, and it’s been amazing to see how it streamlines note-taking, task assignment and preparedness for client meetings, whether it’s a full financial planning session or a quick virtual call,” says Marc Shaffer, a certified financial planner at Searcy Financial headquartered in Overland, Kansas. 

Casey uses AI for client performance reports and presentations for clients and prospects.

Gagnon says having AI summarize financial market performance and identify top market-related news from a prior month “can give you a starting point to draft specific comments and do your own research.”

He adds that you still need to verify the output and sources used to ensure they are correct.

Gagnon relies on Perplexity, which has a $20 monthly subscription. “I like that Perplexity lists its online sources and doesn’t make things up, plus it has different modes for deep research and normal everyday queries,” he says.

Part of his prompt: “Scour the web for the most recent (last market close and/or last month end, whatever is more recent) data on U.S. financial market activity, including major stock indexes (S&P 500, Dow Jones, Nasdaq), asset classes (equities, fixed income, real estate, alternative investments), the economy (monetary and fiscal policy, growth and inflation, and labor market trends), significant market movers, and notable developments in commodities, interest rate markets, and geopolitical events.”

Gagnon adds he tells it to only use reputable, U.S.-based online sources like NBER and the St. Louis Fed. “I ask it to look for themes and trends and describe how the environment has changed from last month and year,” he says. 

Best practices for financial advisors using AI

Start small – Test AI tools in one or two areas before expanding. “Start with the simple stuff, “ says Bruckenstein. “Learn about prompts because the whole key to getting good results from any of these large language models is providing good prompts. Once you get more comfortable, you can try to do more with it.”

“Let’s say historically, you send all your clients gifts for Christmas or the holidays. You could just go to the ChatGPT model and say, ‘I have a client whose hobbies are this and their interests are this. Could you please suggest a good gift for them that costs less than $ 100? Usually, you might spend 15 minutes or half an hour searching the web, while ChatGPT will give answers to you in 60 seconds.” Make sure not to include personal information that can be used to identify your clients. 

Focus on data quality. AI’s accuracy depends on clean, up-to-date data. “Understanding how to source data and know how to verify data can make a big, big difference.” Bruckenstein.

Be transparent – Explain AI use to clients to build trust. “I let clients know that I use AI to optimize portfolios,” says Casey. “The feedback is very favorable because they know they're using it for their work. It’s an efficiency tool, and it’s only getting better.” 

Stay compliant – Ensure AI meets all regulatory standards. “The very first thing you need to think about is compliance,” says Bruckenstein. “Rule number one: protect your client information. You need an AI policy.

If you are doing something on the internet, you don't want to be putting their social security numbers or any PII [personally identifiable information] out on the internet. However, if you are a larger firm and can run your own version of Copilot or ChatGPT on your data, and that's isolated from the internet, that's a different story.”

Keep the human touch – Use AI for efficiency and insights, but maintain empathy as the foundation of client service.

“The communications function is really important because it allows the advisor to retain a personal touch while being able to scale, so it's a major efficiency lever in that sense,” says Trout. But when using AI for client communications, “it has to sound like the advisor. It has to be specific and relevant to the individual client, which still requires some hands-on work,” says Trout.

The bottom line

AI isn’t here to replace financial advisors – it’s a powerful ally helping them become more effective, insightful and truly client-focused. Across industries – from healthcare and law to manufacturing and education – AI is revolutionizing how professionals work, make decisions and connect with those they serve. 

“AI works best as an augmentation tool, not a replacement,” says Shaffer. “Clients want empathy and trust from their advisor, and AI frees us to spend more time on those user aspects.”

“AI will never replace a human unless humans allow it to for the sake of convenience,” says Alajahwon Ridgeway, owner of A.B. Ridgeway Wealth Management in Lafayette, Louisiana.

For financial advisors, adopting AI tools in areas such as personalization, portfolio management, client engagement, compliance, marketing, and workflow automation enables the delivery of smarter, faster and more tailored advice than ever before.

Advisors who adopt AI tools will gain a distinct competitive edge, setting themselves apart in a rapidly evolving market. The sooner you weave AI into your daily workflow, the sooner you – and your clients – will experience its transformative impact, unlocking greater efficiency, deeper trust, and stronger long-term relationships.

Advisors may also benefit from the use of AI by their current providers, whose “developers are now able to write code faster and produce upgrades to whatever technology you’re currently using,” says Bruckenstein. “The cost of developing and bringing software to the market is going to decrease and that’s going to benefit everybody.”

“AI is going to be transformative, not just for financial planning but for almost every aspect of the business,” says Casey. “It feels like its use is increasing exponentially, so I imagine it touching pretty much every area of our lives.”