Forget AI Assistants. Vanguard’s New Tech Helps Manage Client Portfolios

AI may not be taking over your job, but it’s definitely getting a promotion.

Vanguard became the latest financial services firm to launch new artificial intelligence technology: this time, a portfolio analysis tool designed to turn large datasets into client-facing analysis. Advisors just have to upload a portfolio, and the machines do the rest, generating insights as well as handling tasks including stress testing, building healthcare cost projections and making Social Security optimizations. It’s all part of a wave of new tools that are evolving from AI assistants that handle note taking and transcriptions into ones that can help make decisions about portfolio management and more.

“We are putting the expertise of our portfolio analysis specialists directly in advisors’ hands,” said Sid Ratna, Vanguard’s head of digital and analytics for financial professional services.

Commence Phase 2

The Malvern, Pennsylvania-based company has an AI master plan that’s built around three distinct stages: assisting, augmenting and acting. Right now, most advisors are firmly in the first phase, where AI is helping with efficiency by drafting emails, summarizing meetings and taking over some of the grunt work. Those types of tools can save hours of time during meetings, said Jason Pereira, CFA, and a financial planner at Woodgate Financial. “There are all sorts of other kinds of things that need to be done,” he said, adding that AI has helped him audit and compile data into reports in hours instead of the days required previously.

In fact, industry surveys show the vast majority of advisors are already saving time, with many increasing client capacity within just a few months of adopting the tools. And, with the new launch, Vanguard may be getting close to actually augmenting the advisor, instead of simply offering a glorified assistant. “This is where AI starts to play a deeper role in portfolio construction and financial planning, surfacing insights and recommendations that go beyond basic task management,” Ratna said. Still, “advisors make the final call.”

A tsunami of new third-party tools, like meeting assistants and notetakers, have already gained traction in the wealth management industry this year: 

• Merrill Lynch launched a client meeting tool in March that it claimed saves four hours per meeting.
• The wealthtech talk of the year, however, was the launch of Altruist’s new AI tax agent that literally moved the market in February.

Vanguard’s Vision. One day, the firm envisions AI actually taking actions on an advisor’s behalf, all within defined guardrails, of course. It’s potentially transformative, but also … a long way off, according to experts. It seems the robots aren’t replacing advisors just yet, but they could help them achieve Inbox Zero every once in a while.

“The biggest challenge right now isn’t so much what needs to improve because we’re seeing it improve on almost a daily basis,” said Pereira. “The biggest challenge is just keeping up to date with everything that is going on, and figuring out how to adopt, and adapt, these new technologies.”