The wealth management industry is at a pivotal moment, shaped by shifting demographics, tightening regulation, and the growing demand for digital-first, personalised experiences.
As firms adapt to a new generation of investors and the rise of artificial intelligence (AI), balancing automation with empathy has become critical. LSEG director of wealth data solutions Sarlota Hohwald recently discussed how AI is reshaping the sector while keeping client-centricity at the heart of innovation.
Hohwald said the wealth management sector is becoming more technology-led and client-focused as geopolitical events, economic pressures, and regulatory changes reshape global markets. However, she noted that regulation remains one of the biggest hurdles. Fragmented frameworks across jurisdictions are driving up compliance costs, especially for firms with global operations. Tighter fiduciary standards, ESG requirements, and growing cybersecurity obligations are all adding layers of complexity.
Competition is also intensifying as digital players disrupt traditional firms, attracting younger, fee-conscious investors who expect seamless, data-driven services. “Market volatility is making clients more reactive, and firms need to deliver new tools and safe trading experiences—again, costly to keep up with,” she said. Despite the challenges, Hohwald believes the sector remains highly profitable, driven by the generational wealth transfer and the increasing role of digital self-service advice.
Technology, particularly AI, is becoming a cornerstone of transformation. Hohwald explained that while adoption in wealth has been slower due to caution around trust and data quality, the value is becoming evident. Generative AI can summarise large volumes of financial data—from earnings reports to filings—into actionable insights, while agentic AI automates repetitive administrative tasks, giving advisors more time to focus on clients. She added that AI “co-pilots” embedded in CRMs are helping advisors prioritise outreach and deepen engagement, while chatbots are simplifying financial literacy for investors.
Hohwald emphasised that firms must not lose sight of the human element amid these advancements. “
Technology should handle repetitive or data-heavy tasks so advisors can focus on building relationships and bringing empathy into their interactions,” she said. By combining automation with personal connection, firms can deliver experiences that are efficient yet emotionally intelligent. She added that communication tools like integrated messaging and video calls, coupled with sentiment analysis, help advisors stay attuned to client needs and behavioural changes.
Looking ahead, Hohwald believes firms face a delicate balance between scalability and empathy. Regulatory scrutiny and competition are rising, but so are opportunities for innovation. Traditional players must modernise to stay relevant, while digital-first firms need to move beyond gamified investing toward deeper, long-term relationships. “The key is to empower advisors within these constraints and to define how each institution wants to differentiate itself in a crowded market,” she said.
For more, read the full interview here.Â
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