BlackRock is rolling out new artificial intelligence capabilities for financial advisors, and it already has a significant client on board.
Morgan Stanley advisors and their staff members later this month will be the first to access the new BlackRock product.
The asset manager is announcing today that Morgan Stanley Wealth Management is the first organization to deploy BlackRock’s new Auto Commentary feature, the latest offering from its Aladdin Wealth portfolio management platform. The tool aims to produce tailored insights about an individual’s portfolio that can help focus the conversations advisors have with their clients.
“The key to it is really helping advisors do more with the amount of data and information that we’re serving up to them,” says Ted Stratigos, global head of Aladdin Wealth Tech. “It creates that first-draft narrative that an advisor could use with their end client to explain the information in their portfolio.”
The generative AI tool draws on three data sources to formulate talking points for advisors: Aladdin’s own data and risk analytics, the market outlook produced by the wealth management firm’s CIO, and information about the individual client’s portfolio and investment objectives.
The Auto Commentary tool aims to make sense of hundreds of data points within those inputs to create what BlackRock is describing as personalized service at scale. So, for instance, the tool might observe that a client is overweight on a certain market segment or an individual equity compared with the firm’s market outlook or the investor’s own profile.
“They get a very clear breakdown of how the client’s portfolio is deficient relative to the house view and to the client’s benchmark,” Stratigos says, describing the tool as allowing advisors to “very quickly distill the relevant information” about a client’s investment positions. “Advisors spend a lot of time trying to understand the metrics and what’s happening in a client’s portfolio,” he says.
The launch introduces the latest AI-powered tool for advisors, a crowded field that is increasingly focusing on client communications. Wednesday saw the launch of Hamachi.ai, a new venture led by a group of fintech veterans that promises to provide advisors with customized, compliance-checked communications ready to be shared with clients. In May, Vanguard announced an AI-driven tool for summarizing relevant market-perspective articles that advisors can share with clients.
BlackRock’s Auto Commentary doesn’t produce a script advisors can read or send in an email to clients, but it will generate bulleted talking points within a template that advisors can access through a tab within their Aladdin interface. Stratigos says BlackRock is exploring adding relevant market or investing articles from the news media as another data input.
Morgan Stanley advisors and their staff members later this month will be the first to access the new BlackRock product. Morgan says it will integrate Auto Commentary into its Portfolio Risk Platform, which draws on a blend of Morgan Stanley’s own data and risk analytics from Aladdin.
The product will distill “hundreds of analytics and firm-level market insights into a cohesive narrative,” says Chris Scott-Hansen, a managing director at Morgan Stanley who heads the consulting group within the firm’s wealth management division.
“By automating labor-intensive research, we enable our financial advisors to concentrate on what truly matters—building trust through assisting clients in navigating complex market dynamics,” he says in a statement. That adds up to “less time spent gathering data, more time delivering actionable insights to every client,” he says.
Stratigos says other firms—he won’t name names—are working through the legal and compliance implications of the Auto Commentary feature and are expected to become customers.
To access the tool, a firm must have an Aladdin enterprise license—BlackRock isn’t offering the product a la carte. Stratigos says BlackRock has been in talks with large registered investment advisory firms about becoming Aladdin customers, but so far adoption has been limited to larger banks and brokerage firms.
He says BlackRock views AI as a “structural force” that will bring significant change to the wealth management industry over time. But in the near term, the focus will be on “the efficiency factor and how much time advisors could spend with their clients building the trusted relationships, doing holistic advice,” he says. “I don’t see that there’s going to be a shift where AI is going to be completely replacing the advisor. I think the wealth management industry is based on a level of trust, which at this point is very personal.”
Write to advisor.editors@barrons.com
