New AI-driven tools are transforming how financial advisors personalize their services and communications, strengthening relationships with clients.

Imagine this: A client calls you with concerns about an investment fund expected to underperform its peers by 3%. How do you handle the conversation? How might your response influence your ongoing relationship with that client?

According to a report by American Century Investments, about 40% of U.S. investors are willing to sacrifice some returns for investments that positively impact society or the environment. If your client is in this group and is inquiring about a sustainable investment, your response might be more empathetic. Many investors in this category would even accept up to a 10% return sacrifice to support causes they care about, like climate change or social justice. In this case, you may feel aligned with your client’s values and be more open to discussing the potential impact of the investment.

However, if you’re more skeptical about sustainable investing and focus primarily on financial returns, your reaction might be less enthusiastic, potentially affecting how you view the client’s approach.

This scenario highlights a frequent challenge for financial advisors: balancing clients’ values with their financial goals. If you can proactively identify what matters most to a client and tailor your conversations, recommendations, and advice to those priorities, you can not only strengthen the relationship but also uncover new opportunities. In contrast, advisors who offer generic or poorly thought-out advice risk becoming irrelevant, especially as investors gain more access to information and self-manage their portfolios.

This is where artificial intelligence (AI) comes in as a powerful ally for advisors. Emerging AI tools are enabling financial professionals to better understand their clients and deliver personalized service and recommendations. In fact, some of the most advanced AI platforms automate much of this process, making it possible for advisors to customize their approach across entire portfolios.

The Power of Personalization

AI-driven personalization can begin even before the client signs on. Today’s prospecting tools use AI to analyze potential clients across multiple categories, including life stage (such as getting married, planning for retirement, or saving for a home), interests (business, sustainability, philanthropy), and preferred communication channels (text, email, phone, etc.). With this data, advisors can craft initial outreach and advice that are highly relevant to each prospect. Likewise, AI helps match investors with advisors who best align with their financial expertise and values, setting the stage for stronger advisor-client relationships.

Once a client is onboard, advisors can continue using AI to stay attuned to evolving needs. Many platforms allow wealth managers to gather data directly from clients through surveys, which inform more tailored financial strategies. More advanced applications, with client permission, can track client activity across social media and other online platforms, providing real-time insights into what they’re engaging with. This information helps advisors adjust their strategies and offers, ensuring their approach evolves with the client’s life and interests, such as a job change, marriage, or birth of a child.

AI also automates a range of communications to keep clients informed about key financial milestones. Whether it’s sending timely reminders about account updates, life events like a graduation or grandchild’s birth, or relevant voting decisions on climate policies from companies in their portfolio, these small, but significant, touches show clients that their advisor is deeply invested in their journey.

Advice That Reflects Values

AI also enhances the ability of advisors to make meaningful, values-driven investment recommendations. Wealth management platforms now allow clients to consolidate their bank, retirement, and investment accounts in one system. This provides advisors with a comprehensive view of clients’ financial lives. By analyzing transaction data from all these accounts, AI tools offer valuable insights that can lead to more customized investment advice and product recommendations that match clients’ risk tolerance, financial goals, and personal values.

This level of AI-enabled personalization is a game-changer, allowing advisors to offer services that were previously unimaginable. In a time when more people are opting for DIY investing, AI allows advisors to stand out by delivering superior, personalized service and insights.

Catering to a New Generation of Investors

Personalization is especially important as financial advisors navigate the generational wealth transfer underway in the United States. Baby boomers are passing trillions of dollars to younger generations who are passionate about values-driven investing. These young investors care deeply about aligning their investments with their personal values, such as sustainability and social responsibility. Advisors who use AI to understand these values—and reflect them in their advice—will be better positioned to connect with this demographic.

AI also plays a crucial role in helping advisors communicate complex financial concepts in a way that resonates with younger investors. By delivering relevant educational content and advice that speaks to their values, AI enables advisors to engage this audience more effectively.

Conclusion

Thanks to AI, financial advisors can now offer a level of personalization and service that was once unimaginable. By understanding their clients’ values, preferences, and evolving needs, advisors can not only enhance relationships but also remain indispensable in an increasingly DIY investing world. Whether it’s helping clients achieve financial goals or align their portfolios with their values, AI equips advisors with the tools to succeed in today’s rapidly changing financial landscape.