Advisors to rich say AI isn’t a gamechanger for landing new clients

A version of this article originally appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to high-net-worth investors and consumers. become a member to receive future editions straight to your inbox.

Market data firms are touting artificial intelligence as the key to locating elusive ultra-high-net-worth customers. But leaders at elite advisory firms told Inside Wealth they were not sold.

For starters, while AI products can surface data and contact information on ultra-high-net-worth individuals, that’s only half the battle.

“When I’m looking for clients with wealth over $100 million, I have a hard time imagining them getting a cold email and saying, ‘Yes, here’s my balance sheet,'” said Matthew Fleissig, CEO and co-founder of Pathstone, a registered investor consultancy with $182 billion in client assets.

Instead, he said, referrals come when the company operates on a more personal level; For example, Pathstone provided a private jet in less than an hour for a client who needed to get from New Orleans to Albany, New York, before her mother died.

“Things like this show how we can grow our business,” he said. “We create moments that matter.”

AI for leads isn’t the game-changer startups claim it to be, Fleissig said.

“These databases have been around forever, and now people have added a layer of artificial intelligence to be able to mine the database,” he said. “Most of the time, pulling together data sources that are publicly available or that you can pay for and trying to provide you with lists of contacts are very similar strategies. At this point, we can do it ourselves.”

The chief growth officer at a top national RIA told Inside Wealth that he’s done at least 20 demos of AI customer search tools in the past six months, and most are built on widely available large language models like Claude and GPT.

“You’re giving one of the big five LLMs a coat of paint and selling on the fact that ‘Our information is better,'” said the executive, who requested anonymity to talk about customer acquisition strategies. “Do I pay them $100,000, or do I talk to my IT team and find a way to do this for a dollar?”

Andrew Douglass, chief growth officer at AlTi Tiedemann Global, said there is little competitive advantage in using non-exclusive data. When independent wealth management firms cold-called clients from such databases, the client often already had an advisor or had already been contacted by dozens of other firms, he said.

He said customer referrals and personal networks accounted for 40% and 30% of AlTi’s organic growth, respectively, over the past five years. The other 30% comes from networking with experts, such as trust and estate attorneys and accountants, who are likely to work with clients going through a liquidity event such as inheriting a fortune or selling a business.

“Most people come out and say, ‘Our minimum is $25 million, so anyone with $25 million in liquid assets is a great client.’ We don’t think that’s a strategy that ultimately works,” Douglass said by phone from the Heckerling estate planning conference in Orlando, Florida. “We think being truly seen in the marketplace as a subject matter expert, being consistently present and providing value in places like Heckerling and where the professional community is, is the most effective way to grow the business.”

Word of mouth referrals are inherently not scalable and can be slow moving. With an ultra-high-net-worth customer, the sales cycle can take 12 months, if not longer, Douglass said.

But he said recommendations focused on the ultra-rich, such as AlTi Global, look for quality, not quantity. The firm’s annual organic growth target is 25 to 30 new clients in the U.S., which could add approximately $1.5 billion to $2 billion in new assets.

Eden Ovadia, CEO of AI customer discovery startup Finny, said he’s used to encountering skepticism. Ovadia, who co-founded Finny in late 2023, said he sees AI research as a complement to, rather than a replacement for, traditional outreach.

A popular way for senior advisors to use Finny is to promote special events to the right audience, he said. For example, an advisor who wants to invite potential clients to a suite at a Miami Heat game can use Finny to identify people who work in real estate and are interested in the team. Ovadia also said Finny can be used to identify clients who may need advice after a life transition, such as finding people who recently purchased a property worth at least $5 million near Jackson Hole, Wyoming.

“There’s definitely some skepticism that we have to overcome when we talk to ultra-high net worth companies, and they say, ‘No, we’re not doing AI. We want everything to look really personalized, really white glove,'” he said. “I couldn’t agree more. The idea is that we can actually uncover more data about your customers or prospects than you know.”

Finny can also be used to keep an eye on existing customers and watch for signs that they might be unhappy, such as seeking investment advice online, Ovadia said.

Fleissig said he’s more excited about customers finding Pathstone through AI platforms like Gemini and ChatGPT. He said he has received five inquiries from customers worth at least $100 million from Pathstone’s AI search engines in the past two weeks.

Douglass said AI hasn’t changed the way AlTi Global finds new business, but he’s keeping an open mind.

“We’re definitely excited about what the market will look like and bring to life if someone has a better mousetrap,” he said.