Market data companies are promoting artificial intelligence as a crucial tool for identifying ultra-high-net-worth clients. However, leaders at prestigious advisory firms express skepticism about its effectiveness. Matthew Fleissig, CEO of Pathstone, a registered investment advisory firm managing $182 billion in assets, notes that while AI can provide data and contact information, it does not foster the personal relationships essential for attracting wealthy clients. He emphasizes that referrals often stem from personal interactions, such as providing urgent services to clients in need.
Fleissig critiques AI’s role in client prospecting, asserting that current solutions merely enhance existing databases without offering substantial innovation. Similarly, a growth executive at a national registered investment advisor shared a lack of differentiation among AI tools, suggesting that relying on these technologies is not cost-effective.
Andrew Douglass, head of growth at AlTi Tiedemann Global, points out the competitive disadvantage of using nonexclusive data. He states that personal networks and client referrals account for a significant portion of their growth, and emphasizes the need for offering deep expertise rather than merely targeting high-net-worth individuals based on asset thresholds.
While many advisors remain skeptical, some, like Eden Ovadia, CEO of AI prospecting startup Finny, advocate for AI’s role as a complementary approach. Ovadia envisions AI facilitating personalized outreach by identifying potential clients based on specific interests and life transitions. Despite the ongoing debates, Pathstone has already seen some success with AI, reporting inquiries from high-value clients through AI platforms.
Why this story matters: The discussion highlights the evolving intersection of technology and high-end advisory services.
Key takeaway: Personal relationships and expertise remain crucial in attracting ultra-high-net-worth clients, even as AI technologies develop.
Opposing viewpoint: Some firms believe AI can effectively enhance traditional methods, facilitating more targeted and personalized outreach.
