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The head of innovation for TD Ameritrade's 7,000 adviser clients thinks AI, voice assistants, and holograms will define the future of wealth tech

Rebecca Ungarino   

The head of innovation for TD Ameritrade's 7,000 adviser clients thinks AI, voice assistants, and holograms will define the future of wealth tech
voice computing speaker 2x1

Samantha Lee/Business Insider

One major theme in 2030 will be the growth of voice-enabled search paired with machine learning, Fava said.

In 2030, the power of artificial intelligence aiding financial advisers and their clients will be on full display. Voice-enabled search functions will be commonplace. There will be holograms.

That's how Danielle Fava, the director of innovation for TD Ameritrade Institutional, sees tech in the wealth management industry shaping up. Fava shared her predictions about where she sees the industry a decade from now as part of Business Insider's Wall Street 2030 series.

Fave said she expects that advisers will turn to augmented reality and holograms to interact with clients over the next 10 years, and sees that as a logical evolution from video-conferencing.

Fava oversees technology initiatives for the force of some 7,000 independent registered investment advisers (RIAs) that keep their client assetes with the firm. She's also responsible for the firm's voice-first strategy, and developing ways the firm's adviser services arm can mesh with artificial intelligence.

Typically, larger firms with more resources are setting out to harness AI. UBS Evidence Lab report detailed by Business Insider Intelligence found 75% of banks with more than $100 billion in assets said they are currently implementing AI strategies, compared with 46% of banks with less than $100 billion in assets.

The financial services industry as a whole can be slow to embrace change, and the largest firms use massive technology systems for thousands of advisers and clients. And just half of banks globally are making meaningful advances in transforming themselves digitally, a June report from Accenture found.

Charles Schwab is set to acquire TD Ameritrade during the second half of 2020, and it remains to be seen how exactly the firms' business lines, products, and teams will be integrated.

The two firms have been major players in the RIA custody space for years. Analysts have asked executives at both what the acquisition will mean for independent advisers and how they plan to minimize disruption and RIA attrition.

Here's the text of our full Q&A with Fava. You can read our survey of other top wealth management execs and leaders here.

What kind of wealth-tech will be ubiquitous in 2030 - and what may be phased out?

Innovations are coming at us fast and from every direction, so it's difficult to say what will catch on and what will fade away. What I do know is client expectations about how they receive financial advice have changed, and it's not just millennials or Gen Z. It's fascinating to see how technology advances every field are finding new applications in financial services.

A decade from now, one of the hottest trends in technology should be commonplace among advisery firms: voice-enabled search combined with machine learning. Adoption of smart speakers such as Amazon Alexa and Google Home is expected to be faster than for any other consumer device, including the smartphone, as consumers grow more comfortable making trades and checking their account information without clicks and taps.

Likewise, virtual assistants powered by AI help us deliver the right answer on demand at all hours of the day to clients using a range of new communications channels, including instant messaging and bots embedded in social media.

And while video conferencing is already popular, in 10 years I expect we will be leveraging augmented reality and holograms to speak with far-flung clients whenever and wherever they may be, and still enjoy the intimacy of a face-to-face meeting.

AI and machine learning can also help advisers glean actionable insights from written and voice conversations, including the sentiment of clients even if they don't give voice to their feelings.

By 2030, we should expect that AI will be able to help advisers provide their clients with extreme personalization in everything from how and when they communicate all the way to investments. TD Ameritrade's Model Market Center is already well positioned to support customized investments by providing an open architecture platform to support ideas from any manager.

Analysts expect a wave of adviser retirements between now and 2030, and a portion of wealth managers think their jobs will no longer exist in five to ten years. As the industry evolves, how will the job description for the wealth manager/financial adviser of 2030 have changed from 2019?

For years, we've told advisers that technology can make their firms more efficient and give them more time to focus on building deeper, more meaningful relationships. By raising their tech game, advisers can meet the rising demands of a society accustomed to anywhere, anytime convenience.

But at the end of the day, we believe investors will still want to form ongoing relationships with trusted advisers who provide personalized, sophisticated wealth management.

Yes, most of the investment selection and portfolio allocation work advisers have done traditionally is being commoditized by technology, but that frees up more time for the adviser to go deeper: estate planning, tax planning and expert guidance on a whole range of financial decisions - career planning, college and family planning, long term health and care planning - all well outside of the securities markets.

And based on all of the technology advances we are seeing, the adviser of the future needs to be comfortable adopting and incorporating the latest innovations into their practices. We don't see adviser jobs going away. Just the opposite.

Demand is rising and so there is an opportunity - and an urgent need - for our industry to work together and attract a new generation talent by raising the profile of financial planning on campuses and encouraging RIAs to seek out young professionals to help sustain the industry's great success over the past few decades.

Will the wealth management industry consolidate in your firm's segment over the next decade?

Yes, clearly. The RIA segment over the past two years has been in the midst of a historic wave of consolidation, as a number of private equity investors and larger firms set their sights on building nationwide RIA companies.

According to FA Insight research, 2018 was a record year for adviser-led deals, and based on what you see in the papers each week, we are on pace for a new high in deals this year. Consolidation is sweeping every corner of the business, from independent broker dealers and banks to, as everyone know by now, online brokers and custodians.

Are fees for managing wealth going to fall further by 2030?

Adviser fees are not going to fall further, but they will evolve far beyond "wealth management" fees. Our FA Insight research shows that adviser pricing has been holding steady, even in the face of fintech start-ups offering to manage investments for pennies - or for free.

The challenge has been that independent advisers have been offering more and more services for the same fee. We encourage advisers to take a closer look at their pricing to make sure they are getting duly compensated for all the expertise and guidance they provide, not to mention the comfort of a trusted, fiduciary relationship.

Different pricing approaches, like a minimum fee, can help protect firm revenues in a down market, while subscription pricing can help RIAs profitably serve a broader demographic of clients who are still building wealth.

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