Market data firms are promoting artificial intelligence (AI) as the secret weapon for finding ultra-wealthy clients. However, not everyone is convinced. Leaders at top advisory firms argue that while AI can help gather data, it doesn’t guarantee success.
Matthew Fleissig, CEO of Pathstone, says hunting for clients with over $100 million isn’t about cold emails. “They’re not just going to hand over their financial details,” he points out. Instead, real connections matter. He recalls a time when Pathstone organized a private jet for a client in a critical situation. “We create moments that matter,” he explains.
Fleissig believes that the hype around AI for client prospecting is overblown. “We’ve had these databases for years; AI is just an extra layer over the same old strategies,” he notes. Another growth executive from a high-end firm shared that, after testing many AI tools, he found most were just rebranded versions of popular language models, like GPT. He questioned whether spending a lot on these tools was even worth it.
Andrew Douglass at AlTi Tiedemann Global shares a similar sentiment. “Non-exclusive data doesn’t give you an edge,” he says. Referrals and personal networks have driven 70% of AlTi’s growth recently. Douglass emphasizes that being viewed as a subject matter expert and consistently engaging in professional communities is more effective than merely chasing high-net-worth individuals.
Despite the slow and often tedious sales cycle—sometimes taking over a year—AlTi aims for quality clients rather than quantity. “We’re looking to add 25 to 30 new clients annually,” Douglass says, which could translate to billions in assets.
On the other hand, Eden Ovadia, CEO of the AI prospecting startup Finny, sees AI as a tool for smarter outreach. She explains that high-end advisors can leverage AI to target exclusive events effectively. For example, an advisor could invite affluent real estate professionals to a luxurious Miami Heat game. “We’re helping advisors understand their clients better,” she says.
Interestingly, Fleissig has noticed a different trend. Recently, clients worth over $100 million have reached out to Pathstone through AI platforms like ChatGPT. He finds this use of AI promising for initial client contact.
While opinions on AI in the wealth management industry differ, it seems clear that building relationships is still paramount. Firms are weighing the benefits of new technology against traditional methods. As Eden Ovadia puts it, AI can enhance personalization, not replace it.
In a world where trust is vital, it may just be the human touch that ultimately wins over ultra-high-net-worth clients. For more insights on this topic, you can check out research from McKinsey.
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