Wealth managers believe that artificial intelligence (AI) is important to the sector but have raised concerns that it is lagging behind other financial services in adopting the technology, according to MSCI.

Its study found that 68 per cent of wealth managers viewed AI as moderately or very important.

However, just 27 per cent believed the sector was leading AI adoption when compared to the broader financial services industry, while 44 per cent felt it was lagging behind.

Just 3 per cent said AI was not important at all and 9 per cent felt AI was not very important.

MSCI said that the perceived ‘AI gap’ in wealth management could be explained by differences in business models, with wealth managers prioritising scale and client engagement over alpha generation, affecting how they benefit from AI.

It added that advisers may see the greatest benefit from AI when they apply it to their core competency, such as proposal generation and personalised offerings, measuring their progress against their own goals rather than those of other sectors.

“Wealth managers oversee dozens, sometimes hundreds, of portfolios, each with their own constraints, objectives and personalisation needs,” said MSCI Research & Development executive director, Joseph Wickremasinghe.

“Their competitive edge lies not in proprietary data or complex trading models, but in the strength of their client relationships and their ability to deliver a deeply personalised service. In fact, some research shows that human support can outweigh tech in terms of productivity.

“While asset managers and hedge funds often rely on their investment process and access to proprietary datasets as differentiators, wealth managers frequently distinguish themselves through their client relationships and their ability to provide a uniquely personalised service.”

Wickremasinghe argued that, when implementing AI, wealth managers could progress by prioritising their specific needs and the differences between their business models and those of asset managers or hedge funds.

This would mean focusing their AI use on measurable improvements that may support business goals such as growth and client retention, and measuring their progress against their own needs, rather than those of other investment professionals.

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