The Dow Jones Industrial Average shed more than 1,300 points earlier this month in the most dramatic drop since February.
If you are a client of Morgan Stanley Wealth Management, you may have received a message from your financial advisor.
The purpose of the message would be to tell you exactly what happened in the market and what the firm’s investment professionals are saying about it. It would also tell you your portfolio’s current probability of success in light of recent events.
The email would come from your financial advisor. But behind the scenes, they are getting help from a source you might not expect: artificial intelligence.
Morgan Stanley is one firm experimenting with how these new technologies can be applied to better manage clients’ money.
Artificial intelligence refers to the ability for computer science to be applied in ways that replace human intelligence. Financial firms — ranging from big Wall Street names like Morgan Stanley to robo-advisors and start-ups — are all taking a look at how tools such as algorithms, data mining and natural-language processing can help you become wealthier.
Morgan Stanley formally launched its initiative — called Next Best Action — to its more than 15,000 financial advisors earlier this year. Including the firm’s service employees, more than 20,000 have access to the tools.
The technology works by evaluating communications with clients by emails, texts and other notes. It then applies machine learning to evaluate other ideas that can be suggested to the client.
The tool could prompt your advisor to send a message when a stock you have a significant position in has been downgraded by the firm. Or if you live in the path of a coming storm — as with hurricanes Florence and Michael recently — it can send you a note with a list of helpful resources, information on your insurance rights and tips for protecting your pets.
“The machine serves up those ideas to the financial advisor, and then they decide what makes sense based on their practice and the needs of the clients,” said Jeff McMillan, chief analytics and data officer at Morgan Stanley Wealth Management.
Other applications
Natural-language technology is one way that artificial intelligence is being put to the test to handle human requests.
This started hitting the mainstream a few years ago with Apple’s Siri, which could answer task-based requests, such as “Play Taylor Swift” or “What is the weather in New York?” according Ram Menon, founder and CEO of Silicon Valley start-up Avaamo, which is providing conversational artificial intelligence to financial services firms.
Now the technology is advancing to more complex questions to replace human interaction.
For wealth management clients, that means the possibility of getting a more immediate response via mobile apps, websites or voice for routine requests, such as to rebalance your portfolio or sell a stock.
