82% of wealth management advisors believe that artificial intelligence is essential
Having embraced the digital revolution, wealth management advisors (WMAs) don't want to miss the boat when it comes to artificial intelligence (AI).
Wealth management advisors view AI as a valuable tool for improving their efficiency and better serving their clients. They are aware of the challenges related to AI reliability but are willing to gradually integrate it into their processes. Investment trends show a preference for lower-risk products and greater diversification, with ETFs and structured products gaining momentum.
This technology is already seen as a new tool to help investors choose the best-performing investments. It also saves advisors time in an environment where regulatory compliance can be time-consuming.
AI: A Tool, Not an Adversary
AI is viewed as “a tool, not an adversary of the profession,” according to Annabelle Hermant, sales director at Kantar, during the presentation of the 18th CGP Barometer for BNP Paribas Cardif. Delphine Mantz, Director of the CGP and Broker Network at BNP Paribas Cardif, emphasizes that CGPs “are not afraid of AI and want to embrace it wholeheartedly.”
AI in the Testing Phase
: 82% of financial advisors believe that artificial intelligence is essential for the future of wealth management. “Nearly a quarter (24%) are already using it—7% regularly and 17% occasionally. Nevertheless, today, wealth management advisors are testing this tool for administrative tasks or financial analysis […] even though they haven’t yet fully integrated it into their processes,” notes Delphine Mantz.
Use of AI by Financial Advisors
8% of financial advisors use AI to automate repetitive tasks, and 8% use it to assist with asset allocation. Another key finding from the study: this is the top area in which financial planners would like to receive additional training beyond what they already receive in wealth management or retirement planning.
This effort to raise awareness about AI has already begun for some of the approximately 2,000 financial planners partnered with BNP Cardif. The stakes are high because, beyond mastering new tools, it is crucial to avoid falling into the trap of misinformation, as the reliability of certain aspects of AI has yet to be demonstrated.
Major Investment Trends
When asked about major investment trends in life insurance and capitalization contracts over the past 12 months, financial advisors note that their clients favor the least risky products and adhere to the golden rule of diversification.
ETFs favored by financial advisors
Going forward, professionals should encourage their clients to engage in arbitrage. When asked about the investment solutions they plan to offer their clients over the next 12 months, financial advisors propelled ETFs to the top of the rankings. These funds, which track an index, ranked 5th and 6th in 2023 and 2022, respectively.
Nearly one in two CGP (48%) intends to offer more ETFs to their clients in the future. “This meets the need for diversification and also reflects the expansion of the CGP client base,” which is getting younger and more diverse, notes Delphine Mantz.
Structured products, which are also attracting significant capital inflows, have slipped to second place. Thirty-nine percent of financial advisors plan to promote them more actively. Private equity, which is geared more toward a sophisticated clientele, ranks third.
The Stigmatized "Paper Stone"
The euro-denominated fund, which made a comeback in 2023, “secures its fourth-place ranking,” after having fallen to 11th place on the list in 2022. This flagship life insurance investment offers a capital guarantee and has allowed savers to benefit from sharply rising returns, with rates sometimes surging in recent months. Weighed down by the downturn in the real estate market, real estate investment trusts (SCPI, SCI, OPCI) are struggling to stay afloat. Only 9% of financial advisors plan to promote it more actively to their clients.
