The ‘Mass Affluent’ Are Losing Their Allure for Wealth Managers Navigating AI

A new report from McKinsey suggests that wealth managers may reconsider the value of serving 'mass-affluent' clients — those with approximately $1 million in investable assets — as artificial intelligence systems improve. The consulting firm argues that AI can now provide advice approaching the quality of traditional private banking, reducing the need for human advisors for this client segment.

Wealth managers may instead focus their human resources on ultra-high-net-worth individuals, while relying on AI to serve the mass-affluent at lower cost. McKinsey's analysis emphasizes that the cost structure of AI allows firms to profitably serve clients who would previously have been considered too small for dedicated human advisors.

The implications for the wealth management industry include potential restructuring of advisor roles and client segmentation. Some firms may view the trend as an opportunity to expand their client base, while others may see it as pressure to reduce fees or increase automation. The report does not specify a timeline for the shift, but suggests it is already underway as AI systems continue to improve.