Call them cyborgs. Morgan Stanley is about to augment its 16,000 financial advisors with machine-learning algorithms that suggest trades, take over routine tasks and send reminders when your birthday is near.
The project, known internally as “next best action,” shows how one of the world’s biggest brokerages aims to upgrade its workforce while a growing number of firms roll out fully automated platforms called robo-advisors. The thinking is that humans with algorithmic assistants will be a better solution for wealthy families than mere software allocating assets for the masses.
At Morgan Stanley, algorithms will send employees multiple-choice recommendations based on things like market changes and events in a client’s life, according to Jeff McMillan, chief analytics and data officer for the bank’s wealth management division. Phone, email and website interactions will be cataloged so machine-learning programs can track and improve their suggestions over time to generate more business with customers, he said.
“We’re desperately trying to pattern you and your behavior to delight you with something you may not have even been asking for, but based on what you have been doing, that you might find of value,” McMillan said in an interview. “We’re not trying to sell you, we’re trying to find the things you want and need.”
Faced with competition from cheaper automated wealth management services and higher expectations set by pioneering firms like Uber Technologies Inc. and Amazon.com Inc., traditional brokerages are starting to chart out their digital future. It turns out that the best hope human advisors have against robots is to harness the same technologies that threaten their disruption: algorithms combined with big data and machine learning.
The idea is that advisors, who typically build relationships with hundreds of clients over decades, face an overwhelming amount of information about markets and the lives of their wealthy wards. New York-based Morgan Stanley is seeking to give humans an edge by prodding them to engage at just the right moments.
“Technology can help them understand what’s happening in their book of business and what’s happening with their clients, whether it be considering a mortgage, to dealing with the death of a parent, to buying IBM,” McMillan said. “We take all of that and score them on the benefit that will accrue to the client and the likelihood they will transact.”
Morgan Stanley will pilot the program with 500 advisors in July and expects to roll it out to all of them by year-end.
Additional high-tech tools are coming: McMillan and others are working on an artificial intelligence assistant — think Siri for brokers — that can answer questions by sifting the firm’s mountain of research. (The bank produces 80,000 research reports a year.)