We are pleased to welcome you to today's webinar, Mastering Disruption, How AI and Data are Redefining Wealth Management. Before we begin, we wanted to cover a few housekeeping items. For the best viewing experience, we recommend logging in on a computer using a wired internet connection and closing anything running in the background that can cause connection issues. At the bottom of your screen are several engagement widgets that you can use. All of these can be moved, resized, or minimized So feel free to customize your desktop space as you see fit. You can submit questions within the Ask Question widget at any time during the presentation. We'll do our best to respond to your questions, but if we run out of time, we will connect with you after the webinar. I will now turn it over to Alicia.

Thanks, Lexi. Welcome, everybody, and thank you for joining. My name is Alicia Rich, and I'll be moderating our conversation on Mastering Disruption, How AI and Data are Redefining Wealth Management. In this session, we will dive into Broadridge's fourth annual Digital Transformation Survey and Solent's Dimension Study and Report on Wealth Management IT Pressures and Priorities. As technology transforms every aspect of financial services, we'll focus on the strategic areas firms are prioritizing to drive growth, enhance client engagement, and maintain a competitive edge in this dynamic environment. I'm joined today by a great panel, Chris Benson, he's Senior Analyst of Wealth Management Practice at Cilent, Donna Bristow, our Chief Product Officer of Wealth and ICS Canada at Broadridge, and James Connell, VP of Strategy and Business Development at Broadridge. Thank you all for being here today. I'm really looking forward to the conversation. Okay, Donna, I'd like to start with you. In the Broadridge study, we've seen notable improvement year over year. Specifically this year, 72% of wealth firms are confident about their digital transformation journey. How has the concept of digital transformation evolved in wealth management?

Thank you, Alicia. And it's a pleasure to be here and have this really good conversation. I'm looking forward to it. Over time, technology and the focus on digitization has really moved from technology adoption to really how do you enable leveraging technology to actually work and meet with business strategy. Over the years, as investor expectations have changed, firms look for more ways of integrating and leveraging technology to bring a better client experience and really provide tools to the advisors that really started to transform how they're leveraging technology. With the continuous adoption of both technology and the business strategy, firms are now able to continue to evolve and create a better, more personalized experience. Successful firms really have this from a foundational strategy perspective and create roadmaps that really align what their business is looking for in the future and how do they leverage technology to achieve that.

I think I can jump in here as well. First of all, thank you to the Broadridge team for having me. Really excited to talk today about digital transformation, data and AI and wealth management, all topics that we at CELIN and our research and advisory practices have been spending a lot of time working on. Thank you so much for joining us. folks at wire houses, broker dealers, private banks, banks, wealth management firms, and RIAs. And everyone we survey has influence over technology buying decisions. We call this our dimension survey on IT pressures and Priority. So I'll be referring to this survey a number of times throughout the conversation today, but specifically our results in North America, US and Canada. So I guess that sort of sets the stage. So we asked wealth management leaders to share the growth in their technology budgets from the last two years and then expectations of that growth for next year. So on average in 2023, 2024 and 2025, Thank you for joining us. It comes from digital transformation initiatives and updating legacy technology, legacy systems. So you ask Alicia, how is digital transformation evolving? I would argue that when you look at the technology budgets, it's accelerating. So we asked our wealth management respondents about their technology budgets and how much is dedicated to run the business expenses versus change the business spending. And on average, firms tell us that 40% of their budgets are dedicated to change the business spending. That percentage has actually gone up over the last few years. And then just to give another stat, half of executives that we surveyed told us that modernizing legacy and end of life systems and platforms is among their top drivers of technology strategy. Updating those legacy systems, it really builds a foundation for both Thank you for joining us. and just to give sort of a couple of more concrete examples of technologies, cloud-based platforms and open architectures, API integrations, advanced data analytics, AI and now generative AI, all of which I know that we'll be talking about a little bit more today. So whether those technologies are used at the firm level for operations or the advisor level, as Donna had mentioned, to really change the way advisors do their job for the better, all of that really is considered, in my opinion, change the business technologies.

Yeah, that's great, Kris. And we've seen in the Broadridge study as well, in particular, you know, the leaders in the space, they've been investing early, they've been investing big. And so when they look at those strategies, it's less about modernization, right? They've gotten a little bit beyond that point. Now they're looking at where can I leapfrog and where can I gain more scale for my advisors and for my workforce? James, I'd like to bring you into the conversation. From your perspective, how have investor expectations shifted in recent years and how are firms adapting their strategies to meet these new demands?

Thank you, Alicia. It's great to be here today. I think it's a really interesting question because expectations by investors have been constantly evolving. They've been evolving for some time, but I think they've really accelerated in recent years. In our digital transformation and next-gen technology study, executives said that focusing on customer obsession is the top accelerator of digital transformation. but only 27% see themselves in the advanced stages of offering seamless digital experiences. So I think there's real industry alignment behind meeting these new expectations, but it's clear that we really have a way to go. The reason for this might be that if you look at the online portals or the mobile apps, Thank you so much for joining us. and other modern solutions, these interfaces are not only very slick and intuitive, but they also curate content and recommendations for us. And I think that's the level that you see all investor expectations rising to as well. So how do you then translate that, I guess, into client expectations specific to wealth? I think getting to the point where these experiences can be curated and tailored to the specific preferences and sophistication of individual investors is crucial. I think omnichannel communications, allowing investors to really engage how they want, when they want, with their advisors and with their service providers. Real-time data and insights, I think, are becoming critically important. We live in a culture of instant gratification, right? So it has to happen now, and I need to be able to see the latest and greatest with my investments. You know, I think there's really been an explosion of content in recent years that's accessible to individual investors and their advisors. And so with that, it's more critical than ever to separate the signals from the noise and really try to surface insights within that content, right? Give context to things. Lastly, I think really you see that this movement towards, well, it's great you're managing my portfolio, but actually I need further expanded services and investment product access to you, right, as a financial advisor. So there we see things like tax optimization, ensuring that tax implications are considered as part of the portfolio management process. Efficient access to liquidity, so whether it's to support security-based lending, even potentially mortgages, all these different lending and liquidity options is very important. Access to alternatives. I think alternative investments are one of the real hot topics in the industry right now. And we see firms doing everything they can to try to democratize access to these so that investors can benefit from some further diversification and potentially enhanced returns. And then lastly, overall, I think it's just more personalized holistic financial planning and recommendations. So making sure that firms are integrating their technology to capture all this great data and enhancing the technology they have, but also changing their operational structure, deploying teams and expanding and optimizing their service delivery based on what roles different individuals have within the team. Chris, you and I have talked about how technology can play a role here quite a bit in the past. So it'd be great to hear from you and hear about some of your research on this.

Yeah, absolutely, James. And I think I'm going to echo a lot of what you just said. But to add to that, from our perspective at Sellant, we know that one of the top drivers of technology strategy for wealth management firms is enhancing the investor experience. So, Alicia, you asked, how are firms adapting to investor expectations? My answer is technology. and where technology's role comes in when you think about investor expectations and investor experiences is personalization. Technology can, as you mentioned, James, unlock more comprehensive views of investors' individual needs. It can also enable advisors to personalize financial advice at scale. And I'll give you a specific example, technology to personalize portfolio insights. From our surveys, we know that the number one technology investment priority from a product or service perspective of wealth management firms is data insights and analytics. and this is both for investors and also for advisors. So that includes real-time performance analytics. I know you said that, James. Customizable dashboards and portfolio views, customizable benchmarking and, you know, based on investors' goals and goal-based models. And I know that the Broadridge performance analytics product really does all of that. So tech platforms like Broadridge, they're allowing advisors to provide those tailored portfolio analytics at scale. And just to name a few other examples of where we're seeing technology to facilitate personalization, platforms integrating ESG as part of portfolio construction. James, you said this one, it was on my list, incorporating alternative investments as part of portfolio construction. And then Lastly, direct indexing solutions that allow customizable portfolios at lower investment minimums. Those are all examples of technology personalizing portfolios. I also wanted to comment on what you said, James, about holistic financial advice or what we like to call the idea of holistic financial wellness. It's certainly an emerging priority in Thank you so much. and they're having partnerships with insurance carriers. So that idea of convergence of those business lines through open ecosystems, that's a topic that we're going to cover a lot more at Cellent in the future.

That's great, Kris. where firms are going and what technology they're introducing. Now, we can't have a technology conversation without talking about artificial intelligence. So, Kris, I'm going to stick with you. How are wealth management firms exploring AI to enhance client centricity and where do you see firms focusing their investments?

Yeah, of course, talking about AI. So in our surveys, we asked wealth management executives what functional areas are they making the greatest investments in AI over the next 18 months. So this is traditional AI with machine learning, natural language processing, intelligent document processing, but now also generative AI. And from an investor centricity standpoint, like you asked, the most common areas in North America that we're seeing are one, onboarding, so AI to automate document ingestion, KYC, AML, those are common use cases, basically making the process Thank you for joining us. and this could include advisor marketing and prospecting software. So AI that helps advisors with segmentation and targeting, identifying new investor opportunities and then sort of pairing those new investors with content that they'll find relevant. AI is helping advisors do that at scale. Another area within the sort of advisor portal world, performance analytics. I touched on this before, but machine learning to find patterns in vast amounts of performance data to tailor the sort of portfolio or performance analytics based on the individual investor's goals or custom benchmarks. And then AI within CRM and practice management. So Recommending next best actions for advisors to mitigate churn, identify growth opportunities across their investor base. And then finally, AI within financial planning. That is automating plan recommendations, proposals and stress testing based on, you know, enterprises internal repository of plan data and performance data. So AI that can help tailor financial plans, again, based on an individual investor's circumstances or goals. So those are a few common examples that we're seeing AI to help the investor really both better understand and serve their investors, but also to identify growth opportunities for their business. and I also did want to touch on generative AI a little bit more specifically here. Again, through the lens of investor centricity. So we have a executive panel of wealth management executives. So this is a different survey than what I was talking about previously. So these are leaders at top tier firms. Most of them are in North America and we asked them Thank you so much for joining us. Thank you so much for joining us. Thank you so much for joining us. Yeah, just all examples, I think, of AI and generative AI really used for that idea of investor centricity. But on the Broadbridge side, I'd love to hear what you all think and hand this question over to Donna.

Thanks, Kris. I just want to follow up on some of the great points you just made. AI and access to data is really enabling and helping an advisor meet the needs of the investors. The investor expectations now are so much more heightened. They want communications in the manner that they prefer, so the whole focus on personalization or even hyper-personalization. Thank you for joining us today. It's doing analytics and it's enabling information for the advisor so then they can actually perform and meet the needs of their investors at scale. And that's becoming really important as advisors are also looking at providing services that are far more complex in the market. You mentioned alternatives, there's new products that are being offered. products that were traditionally offered to high net worth are now being offered to the mass affluent, which allows the investors to have more access to information. So again, using AI and data and digitization to enable that conversation with the advisor and their investor is just so key that it's taking it to a whole new level, quite frankly. and you know when you look at the role of an advisor it's changing you know when we look at it we like to refer that in many cases the advisor is becoming a life coach not only to the investor but also to the family you know getting to know the entire family getting to know what's important to them and taking them through financial planning helps with that those tools but taking them through the life events is becoming Thank you for joining us.

Thanks, Dana. You're right. It's, you know, at the end of the day, that human element is critical. Trust, authenticity are key. This is, at the end of the day, a relationship business. We're focused on building better outcomes for people and their families, and we can't lose sight of that. So the idea that we're using this to help advisors, enable advisors, make better decisions to lead to better outcomes is making sure that their advice is rooted in what's best for the investor. That's all critical. James, so we know that data plays a huge role in enhancing these client experiences. How are firms leveraging the data to improve their solutions?

Yeah, it's a great question, Alicia. I mean, I think, look, data is not new to the realm of financial advisors trying to get to better know their clients. I think what's changed is the desire for more centralized holistic data to be connected across the ecosystem and viewed within the proper context of a client's traits, their preferences. Thank you for joining us. So the increased prevalence of financial planning software, CRM tools, portfolio management systems, they've all added tremendous value to the industry, but they've created these disparate databases that we now have to deal with and try to pull together these insights from. I think the current approach and how firms and advisors have been using it has been to look at pulling together this data, whether it's extracting it from the systems or trying to layer some intelligence on top of it in silos to really maximize their client engagement efforts. But unfortunately, there's a fairly heavy administrative burden to that, which takes away from the time that advisors could be spending deepening relationships and focusing on growing their business. So, you know, I think that the burden really falls to these firms to look at how do they empower advisors better with this data. So pushing insights to them rather than forcing the insights to be pulled by the advisors or their teams. And I think we're at a really exciting inflection point for that. And we're starting to see... and many firms really connected the insights, but we're just scratching the surface. In fact, in our digital transformation study, 82% of firms stated they were making moderate to large investments in data management and visualization tools, right? So I think there's the part of it where they're trying to build the building blocks and then there's the exciting piece of what intelligence can be layered on top of that and really expand the efficiency and intelligence of the advisors themselves. As I think about where this could go and the potential. I kind of think back to like what the promise originally of robo advice was, which was to try to democratize that personalized service at scale, right? And I think by incorporating, you know, far more robust data sets and profiles of investors, you can get past that just raw segmentation, you know, AI of five profiles of investor types to a much more individualized view. Thank you so much for joining us.

and 2025. And the most common answers that respondents had were number one, data platforms and management, and number two, artificial intelligence and advanced data analytics. So firms are absolutely making data a priority. And I guess to touch on what you said originally, Alicia, on the idea of what role does data play in and many more. held away assets and liabilities, insurance data, annuities, all in one place. That's the starting point for improving services for investors. And again, this idea that we've been talking about of providing holistic advice. And I do know that the Broadridge Wealth Aggregation and Insights product that has all of this that I'm talking about. So then there's managing the data so that it's clean, it's normalized, has the right access controls. It has automation, so there's not a lot of manual updating by operations teams. And then on top of that, there's robust APIs and integrations with both the other proprietary systems, but also the third-party systems that James was talking about earlier. The applications at financial... are using. So connecting the CRM with portfolio management with marketing software. And the data, all that, the data has to come first in order for firms to fully make decisions Thank you so much. for investor experiences, personalization, and again, holistic financial well-being. So, yeah, I think I just sort of want to emphasize data and data management is the starting point. And then, once again, data in one place, a centralized repository, I think that really is key.

Yeah, it definitely is. We all know the saying, garbage in, garbage out, right? And this is a really critical time for us to make sure that we've got everything aligned and a full strategy on how to manage. And to James's point earlier, there's many more sources of information and bringing that all together in a cohesive way so we can really give the investor what they need. Well team, we've covered a lot of topics, acceleration, strategy shifts, curation, customer obsession, segmentation, advanced analytics, data as an asset, data coming first. We'll go to a very frequent topic that we have in wealth management and that's about regulatory. So James, how are regulatory changes Impacting digital transformation strategies and wealth management and how do firms navigate these challenges?

Sure. Thanks, Alicia. Everyone's favorite topic, right, is regulations. But believe it or not, I think there are some examples of regulations providing opportunities in addition to the challenges of compliance that we often see. So, you know, let's start with the opportunity side of things and give an example there. I think you see this secure 2.0 regulation that's been passed and coming about. It's going to dramatically increase retirement savings in this country in the coming years. This is going to increase the opportunity for advisors, right, as well. I think as they look over to roll over traditional retirement accounts and provide more holistic service to their existing clients, you know, such as financial wellness planning and, you know, just having that full picture of assets together, that's going to be a key value driver for them to offer. And additionally, it's a great pool to try to prospect from, right? So we already see a great increase in rollovers in the data and advisors being able to Thank you so much. and many more. to consider how they can improve operational efficiency, right? So, for example, the movement to T plus one settlement period certainly entailed a heavy lift by wealth institutions. But over the long term, a lot of these operational adjustments, I think, are likely to lead to efficiencies that benefit firms, investors, the industry as a whole, right? And start to move us closer towards that straight through processing that we're all kind of targeting in the operational world. Flipping the question, too, and one last point I wanted to add is I think there's a concept here of how can digital transformation help the ability to navigate regulatory change, right? So it's not just about regulatory change driving things, but digital transformation can make it far easier for firms to enhance their compliance, right? And so we're seeing, I think, the improved enterprise data management, right, the deployment of A.I., Thank you for joining us. for firms. Kris, you see so much probably on the client side and engaging with firms on how to handle some of these regulations. So it'd be great to hear from you on this as well.

Yeah, of course. So we've asked firms, what is your number one driver of technology spending strategy? And the most common answer is meeting compliance and regulatory requirements. And this has become more and more important. I think it was the number two answer last year. It's the number one answer this year. And then I think that it's not the whole story when you look at the other answers So the number two most common answer was, and I mentioned this one earlier, the idea of replacing or modernizing legacy or end of life systems. And the number three answer was greater speed and agility. So I think Yes, there's a balancing act between sort of that number one answer of driving technology strategy or spending strategy regulatory requirements, but balancing that with those other two answers, which are really in a nutshell are about digital transformation. And I think that how we're seeing firms sort of navigate these challenges is is really to have a platform and a partner that can simplify it all for you. So regulatory reporting, accounting, communications, data management, automating compliance monitoring, these are all examples that could be outsourced with the right partner. And I just personally think that having the right partner actually allows you to view the idea of compliance that, as you mentioned, kind of sort of flipping that around, it could be seen as a competitive differentiator if executed in the right way.

Okay, well, that's great. Thank you both for putting such a positive spin on regulatory and the opportunity that it can often bring firms not just focusing on some of the challenges. Appreciate it. Okay, so now we have a couple of quick hits. I will do a round robin with the panelists. Donna, I'm going to start with you. What's the most exciting tech trend that you're watching in wealth management right now?

I would say, quite honestly, real time. Everything is evolving to become real time. So the ability to provide real time data, real time collaboration, real time information, you know, it's fascinating because we're getting so used to instant Real-time responses on our iPhones. As an investor, you expect the exact same thing when it comes to wealth management. So for me, it's just how everything's shifting to be real-time no matter what the request or what the ask is.

James, how about you? Same question.

It's a tough one, right? There's so many that I'd love to pick from. I love talking about democratization of alternative investments. So that would be one that, you know, I think is going to have a real impact. But overall, you know, what I think is the most impactful is probably the emergence of integration technology, right? And how These systems are going to come together at a foundational service level as well as a user interface level to really optimize the experience for advisors and for investors, right? So they get far more time to focus on value-added activities, less time on administrative burden. You know, I think AI can play a role in that over time as well. But I really think it's exciting when you think about where the industry is heading that you're going to be able to spend so much more time looking at clients, right, and how I engage with my clients and best serve them. rather than some of the less exciting parts of the job.

How about you, Kris?

Can I have two answers? No. I think generative AI is the easy answer. We've written quite a few reports about it. It's starting in marketing and customer service, as I mentioned before, again, employee-facing. But we're starting to see adoption start to move towards investment functions. So think about investment research and portfolio management and also business intelligence, so the practice management side for advisors. In our studies, it appears that the productivity gains are real. And if I had to have a second answer, it would be alternative investments, as James said as well.

That's great. Yeah, it is going to be interesting to see where this will take us. What the early days are showing is that although I'm gaining more productivity, advisors are not necessarily gaining scale and adding more clients. They're just spending more quality time with the clients that they have. So seeing how this evolves over the next five years will be very interesting. Okay, next one. One word, if you can, to describe the future of digital transformation in wealth management. James, I'll start with you this time.

Can I do one word with like a hyphen, right? So I'll give you a client-centric. Client-centric is what I would go with.

Awesome. Excellent. Donna? Simplification. Good one. And Kris?

Open. So open architectures, cloud-based API integrations.

Nice. I like it. Okay. All right. The last quick hit that we have, what is one innovation you think will become a game changer in the next five years? And Kris, I'll start with you.

Sure. So we basically asked the same exact question to our sample of wealth execs in North America. I think we used the phrase, you know, greatest impact on wealth management. You know, you used the word game changer. I think it's all the same thing, right? So the top answer that we saw was wealth as a service. So you hear of banking as a service, it's wealth as a service. It's basically unbundling the wealth tech stack through component products and services. And this is already allowing wealth management firms to be more agile in their digital transformation initiatives. And I know that the Broadridge Wealth Platform is enabling this today.

Yes, near and dear to our hearts on this call. James, how about you?

So I'll take this one to talk a little bit about alternative investments quickly. So I think I think we see a real interest in both sides of the market, the institutional side and the wealth side, in democratizing the access to these alternative investments. I think that there's a lot of value that they can bring in terms of diversification and return to investors, but there's a lot that comes along with that process. So everything from looking at how you educate clients and how you take them on the journey of selecting the right alternative investment product. I think into how do you get regular updates and reporting onto these securities, right? Because today it's not nearly as seamless as what you get with traditional investments. So I think there's a lot of changes that could happen there that are both going to benefit the access directly to alternative investments, as well as you could see the piloting of some new technologies that eventually have ramifications beyond just alternatives. So things like Tokenization could have an impact there. Might be a little bit further out than five years, but I do think that's a really exciting and disruptive trend in our industry.

And Dana, how about your thoughts?

To be honest, I'm going to say AI. I think the industry is just starting its journey. on how we're going to be using AI in the future. Technology is using it even for how we code and develop new capabilities. Firms are using AI both internally as well with their associates and just how they run their business. Very similar benefits that we talked about earlier. Advisors we've covered. And I think in the future, AI is going to be available for investors. It's going to go directly out to an investor to bring them even more benefits. without having to go through an advisor or a firm. So I think we're just starting the AI journey and I think that's going to have a tremendous impact on wealth management in the future.

Excellent. Awesome. Well, thank you all for your participation today. It was a great conversation. I hope that everyone was able to take one little tidbit out of this and get some practical advice on how to think about transformation and how to put this into your ongoing processes and strategies. Again, thank you, Donna, Kris, and James, and thank you everybody for joining us today.