Consulting firm McKinsey has predicted a transformative decade for wealth management in the United States, arguing that wealth management for high-net-worth individuals will increasingly look more like “life management” as offerings evolve through increased use of artificial intelligence.
What has traditionally been the domain of ultra-high-net-worth investors will become more readily available for clients with lower net worths, McKinsey said in a new report. Access to improved technology, including agentic AI and greater data integration, will allow wealth managers to implement more bespoke services to a broader set of clients. These services include financial planning, family governance, tax and estate structuring, trust administration, customized insurance, balance sheet optimization, philanthropy, medical concierge, and lifestyle services, per the report.
“When we survey individual investors, whether they have $100,000 or $100 million in investable assets, there was a very clear trend: They want a more holistic set of services, capabilities, and support,” said Vlad Golyk, head of McKinsey’s wealth management practice. However, the current human-driven system involves a lot of work and a lot of expense, he said, adding that family offices are essentially a very expensive human middleware between disconnected financial systems and data.
“AI and data platforms will make everything cheaper,” he said. “This might sound futuristic, but if AI can do 80 percent of the work and have it overseen by people, then the unit economics of these types of services will go down. That means wealth management firms can start offering those services to more people because of the economics.”
However, such cost savings will require an upfront investment, including deep integration of technology through partnerships and acquisitions, as well as a dedicated focus on how best to govern new systems.
This could pose an existential risk to the wealth management industry, said Golyk, warning that a new set of technology companies could take market share from traditional wealth managers in an AI-driven marketplace. However, he believes existing players will adapt to fill the space.
“There is absolutely space for an AI-first business model, similar to what we had with robo advisors,” he said. “But people still want the human touch. Finance is just as much as much about numbers as it is about emotions; the competitive edge would belong to those who can combine this autonomous intelligence with human oversight and delivery.”
For example, members of a wealthy family typically don’t want an automated report explaining what they should do; they want a human to walk them through it, explain it in simple terms, and then implement and deliver it through products, services and execution. “The human element is important and will continue to be important,” Golyk said.
As advisors pivot to help clients in all aspects of life beyond portfolio management, the role of a financial planner could look more like that of a life coach. This will require a change in how talent is managed as advisors need to develop entirely new skillsets.
“Advisors are essentially moving upstream to help people decide how to optimize the full financial picture and think through specific life choices,” Golyk said.
