AI can’t match human advisers for wealthy clients, HSBC survey shows

[LONDON] For the truly rich, artificial intelligence can’t compete with human advisers in handling many of their needs, according to a report from HSBC Holdings.

The HSBC survey shows that 62 per cent of wealthy people still turn to human professionals as the main source of investment ideas. Conducted by Ipsos and based on responses from about 10,000 affluent and high-net-worth individuals, the analysis also shows that only 12 per cent said AI was the most influential factor in decision making.

“Clients are increasingly using AI to explore their options, but when it comes to making investment decisions, they value judgement, context and accountability from a trusted wealth adviser,” Barry O’Byrne, chief executive officer of international wealth and premier banking at HSBC, said in a statement.

It is the latest attempt to figure out how AI is upending the finance industry, as HSBC and other banks plan jobs cuts that are driven in large part by the technology. When it comes to wealth management, though, the signals are mixed. McKinsey & Co recently suggested that AI will likely replace humans for clients with US$1 million or less in liquid assets. Citigroup, meanwhile, is hiring hundreds of wealth advisers in response to the growth potential AI represents.

But age matters, and the next generation of the truly wealthy may be happier handing more to AI and relying less on humans, according to the HSBC survey. Gen Z and millennials – a group that broadly encompasses people aged up to 45 – consistently prefer AI together with advisers “across every major financial task”, it said.

Professionals in the industry, where senior managers handling ultra-high-net-worth clients can earn millions of US dollars a year, are trying to figure out what exactly makes a human adviser irreplaceable by AI. That’s as the list of AI products continues to grow. Anthropic’s Claude, OpenAI’s ChatGPT and Alphabet’s Gemini already offer tools that allow users to model portfolios, optimise taxation and even explore possible philanthropic ventures.

HSBC said it is now accelerating what it calls adviser-enabled AI in wealth, including the continued rollout of its tool, Wealth Intelligence, to several markets. The bank says the platform draws on more than 10,000 data sources, including HSBC research and external news feeds, “to help relationship managers arrive at client conversations better prepared.”

At the same time, the bank’s survey makes clear which human attributes are proving hardest to supplant with AI.

The “most valued adviser contributions” include applying judgement and validation, spotting mistakes in AI-generated data and providing a personalised interpretation of complex data, the bank said.

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“Investors primarily use AI for analysis and research, strategy support, and to provide a second opinion on their ideas,” HSBC said in the report summarising findings of the survey.

Against that backdrop, McKinsey has suggested that AI’s arrival will likely lead to the creation of an entirely new job class within wealth management.

Firms may increasingly need to rely on “specialists, behavioural data scientists, personalisation architects, and human-in-the-loop oversight professionals” to monitor AI’s output, according to Debasish Patnaik, a senior partner with McKinsey. BLOOMBERG