David Wu and his team at Morgan Stanley Wealth Management have been revolutionizing the world of wealth management through the creation of its AI-powered assistant, called AI @ Morgan Stanley Assistant. (David discussed the topic at the AI Summit New York 2023)
This innovation is designed for their financial advisors in wealth management. By directing the capabilities of GPT-4 technology at their extensive library of proprietary research documents, the team has crafted an interactive system that extends far beyond the limitations of traditional keyword-based queries. Advisors are now able to engage in a dynamic conversation with the AI, asking complex questions such as, “What are the benefits of a 401k instead of an IRA?” The system meticulously sources from the original documents to ensure transparency and accuracy.
The development of this revolutionary platform has encouraged collaboration between the wealth advisors, technology, risk and compliance, with intuitive features enabling users to contribute to the AI's learning through simple feedback mechanisms such as “thumbs up” and “thumbs down”.
By identifying the date of the information sourced, the AI provides an additional layer of context; advice from a week ago sounds fine, while content from three months ago may trigger skepticism. This chronological intelligence was developed and refined at a remarkable pace: from a prototype in late 2022 to a pilot involving a hundred financial advisors by March 2023, with initial usage garnering overwhelmingly positive feedback. Now, the program is being used by most of their financial advisors. Change, however, necessitates adaptation.
One of the significant shifts has been in teaching users to communicate with the AI as they would with a new research analyst. This promotes a culture of realistic expectations and clear boundaries. Since the platform operates within a highly regulated environment, it is essential to focus on its proven strengths and openly recognize its limitations by admitting when it does not have an answer—thus avoiding misleading "hallucinations." This disciplined approach positions this initiative more as an ongoing research and development project, where "lab reports" are routinely generated, and each "experiment" is an opportunity to discover what works and what does not.
The return on investment is anticipated to manifest over time following the AI's full-scale deployment, with the overarching goal of establishing a foundation for future applications. The true value proposition lies in time—the most precious asset for financial advisors. If an AI can conserve just an hour of an advisor’s time, it's considered a monumental success. On the horizon is an automated note-taking feature that can draft documentation for editing or augmentation by financial advisors, seamlessly integrating with client relationship management systems and streamlining the follow-up process. Morgan Stanley's advisors are renowned for their interpersonal skills—their role as "people people" is unquestioned. This technology empowers them to focus on that strength by alleviating the burden of administrative tasks.
Yet, perhaps the most unexpected revelation was recognizing the necessity for a collective effort. The joint cooperation of tech specialists, financial advisors, legal experts, compliance officials, and risk management personnel has proven crucial. Transitioning to functioning akin to a research and development unit, the various departments have transformed and adapted into their innovative roles—ranging from conventional financial experts to "prompt engineers."
Looking forward, Morgan Stanley Wealth Management is championing the use of AI in various scenarios, for example:
Research: Assessing and comparing market outlooks for major tech entities like Apple, Google, and Amazon using Morgan Stanley's content to inform AI responses, all while prioritizing up-to-date information.
Responding to client life changes: Assisting advisors with providing curated advice for clients undergoing significant life events, such as marriage or the passing of a loved one, by supplying relevant checklists and articles.
Risk management: Integrating risk and retention parameters to tailor guidance that aligns with clients' profiles.
The journey of integrating AI assistants in wealth management, led by David Wu and Morgan Stanley, illustrates an enterprise that is continually evolving, blending state-of-the-art technology with human expertise to forge a path of innovation and exceptional service.