Only global powerhouses can flourish

Advances in AI that are now forcing a violent repricing in wealth management will accelerate consolidation within the financial services industry, concentrating market share in “heavy global advisory firms equipped to handle complexities that algorithms alone cannot handle.”

That’s the bold prediction from Nigel Green, CEO of deVere Group, as stocks across the sector retreat following the launch of a new artificial intelligence-powered tax planning tool that claims to generate fully personalized strategies in minutes.

He says: “This is a reckoning for the financial services industry.”

“Investors rightly wonder which part of advice is a process and which part is truly strategic.”

Markets have reacted sharply to the idea that AI can analyze tax returns and income data almost instantly, raising concerns that traditional advisory fee models are facing structural compression.

Automation threatens to make elements of domestic tax optimization faster, cheaper and more accessible.

Nigel Green agrees that part of the industry will now change permanently.

“AI will compress the commoditized part of advice. Routine single-country planning will become more efficient and price-competitive. This transition is happening in real time,” he says.

However, he argues that the sell-off reflects the assumption that asset management is primarily about calculating tax outcomes within a single jurisdiction.

In reality, global wealth has become more complex at a time when geopolitics is fragmenting the international system.

“An algorithm that operates within one tax code operates in a closed framework,” explains Nigel Green.

“But clients are increasingly holding assets, pensions and business interests in multiple jurisdictions. Residency rules are changing, bilateral tax treaties are evolving, the treatment of capital gains varies and regulatory differences between regions are widening.”

He also adds that the limitations of AI are becoming more apparent as geopolitical risk increases.

“Geopolitics now has a direct impact on portfolio construction. Trade disputes, sanctions, regional conflicts and regulatory realignment between blocs influence capital flows, currency exposure and asset allocation decisions,” he says.

“If wealth simultaneously depends on several very complex, very societal, very human and constantly evolving geopolitical scenarios, advisory decisions cannot be reduced to an AI dataset.”

He continues: “Governments are adjusting tax policies in response to debt pressures and domestic priorities. AI can process data quickly, but it cannot independently anticipate how changing geopolitical realities will alter long-term structural decisions.”

He believes that the current price revision is part of a broader segmentation of the sector.

“Businesses built around domestic, process-driven consulting models are more exposed to automation-induced compensation compression,” notes the deVere CEO.

“Companies that operate in numerous jurisdictions and coordinate their wealth through complex regulatory, tax and geopolitical environments are in a different category.”

Historically, operating internationally increased operational burdens and compliance costs.

“In an age when automation reduces the value of routine tasks, that same international complexity becomes strategic isolation.”

“AI simplifies the uniform. Global asset management is never uniform.”

He expects consolidation to accelerate as investors and clients differentiate between commoditized advisory functions and globally integrated advisory platforms.

“Technology will reshape delivery, but it won’t eliminate the need for experienced supervision. In fact, far from it. It will become more valuable than ever.”

Nigel Green concludes: “The sharp market reaction resulting from advances in AI marks the beginning of differentiation rather than decline, and the beginning of a new, competitive hierarchy within asset management.”

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