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Envestnet Reveals Transformative AI-Driven Insights for Advisors in 2024

Introduction
In the ever-evolving landscape of wealth management, Envestnet is pioneering advancements that shape the decision-making processes of financial advisors. Recently, the company unveiled a series of AI-driven insights that will be critical for advisors aiming to optimize client portfolios throughout 2024.

As financial markets respond to various economic conditions, the necessity for informed decision-making has never been greater. Envestnet's wealth management platform harnesses AI technology to provide actionable insights that cater to the diverse needs of both enterprise advisors and registered investment advisors (RIAs).

Key Insights Revealed

According to data from Envestnet, two major themes have emerged among the top insights leveraged by wealth advisors:
1. Addressing Underperforming Products
2. Leveraging Tax Strategies

These insights highlight the growing emphasis on enhancing portfolio outcomes for clients. Addressing underperforming products allows advisors to reassess their strategies, ensuring that client investments perform up to standards. Meanwhile, implementing tax strategies, such as tax-loss harvesting, proves beneficial in managing client portfolios efficiently, particularly in volatile market conditions.

Molly Weiss, Group President of Envestnet’s Wealth Management Platform, highlighted the significance of these insights:

"Advisors are leveraging these insights to enhance their clients' portfolios and develop more personalized, tax-efficient strategies."

The Role of the Insights Engine

Envestnet's innovative Insights Engine plays an essential role in providing these valuable insights. This tool analyzes client data to surface hidden opportunities, risks, and challenges, allowing advisors to adopt proactive measures. Thus, it becomes an indispensable resource for optimizing client engagement and overall portfolio performance.

The emphasis on technology adoption, especially AI tools, has seen a shift in the advisory industry. While only 9% of practices currently offer these tools, a stunning 72% plan to incorporate AI in the coming three years, as reported by Cerulli Associates.

Key Differences Between Advisor Types

Interestingly, the insights for enterprise advisors and RIAs show distinct patterns. While both groups prioritize underperforming products and tax-loss harvesting, their third-ranking insights differ:

• - Enterprise Advisors: Addressing Life-Insurance Gaps

This strategic insight presents an avenue for enterprise advisors to differentiate themselves by incorporating holistic services, including insurance considerations.

• - Registered Investment Advisors (RIAs): Identifying High-Fee Products

This insight highlights RIAs' trend toward seeking cost-efficient investment solutions for clients, with a focus on reducing fee burdens.

Furthermore, both advisor types recognized retirement planning as a common priority, emphasizing its vital role in ongoing financial strategies.

The Significance of AI in Wealth Management

The emergence of AI in wealth management is transforming how advisors operate. By leveraging data-driven insights, advisors can make informed, strategic decisions that not only mitigate risks but also amplify tax advantages. As Jeremi Karnell, Head of Envestnet Data Solutions, put it:

"Having underperforming products and tax-loss harvesting at the top of both lists shows that advisors are increasingly turning to these insights in an effort to improve client outcomes, regardless of advisor type."

Conclusion

As Envestnet lays the groundwork for the future of wealth management, the commitment to integrating AI technology remains clear. The company’s insights engine exemplifies how financial advisors can embrace transformative tools to enhance their practices. For those seeking to make profound impacts in the financial landscape, staying attuned to these AI-driven insights will be essential in crafting effective financial solutions for clients.

To learn more about Envestnet’s Insights Engine and how it’s revolutionizing financial advice, visit Envestnet.