AI simulation is allowing financial firms, wealth managers and family offices to test new propositions at scale by modelling the behaviour of real-world clients in changing market conditions.
According to a study published by EY last month, the technology, which combines real-world data with simulated data to create agents that mimic human behaviour, is set to give advisers to (U)HNW clients a new way to understand decision-making and anticipate reactions before deploying strategies.
The use of AI in wealth management has been gaining momentum, with a growing number of banks, including LGT, J.P. Morgan Private Bank, St James’s Place and RBC, rolling out ChatGPT-style technologies and dedicated tech teams to support adoption.
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Until now, AI in wealth management has been used mainly to streamline workflows, reduce costs and improve the client experience.
But its role is expanding fast. By 2027, AI-driven investment tools are expected to become the primary source of advice for retail investors, with usage projected to reach around 80 per cent by 2028, according to Deloitte.
Amid this trend, EY has pioneered the first use of AI simulation for strategic insight in the wealth and asset management industry. The firm recreated its 2025 Global Wealth Research Report in a single day, achieving a median correlation of 90 per cent on findings that would normally take six months.
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‘The challenge of making predictions has always been getting access to data, analysing it, and acting upon it, as often by the time you’ve done all of that, the world has already changed,’ EY Americas wealth and asset management consulting leader Ugur Hamaloglu tells Spear’s. ‘This technology [AI simulation] uses synthetic data to simulate human behaviour and get results within weeks, maybe even days,’ he adds.
Rather than relying on surveys that ask people what they think they would do, AI simulation models likely behaviour using digital personas. This allows organisations to simulate the actions of large populations in a short time, providing a clearer picture of how strategies might play out in the real world, with minimal time and capital risk.
‘Think of it as creating a digital twin of your market – a living laboratory where you can test strategies, predict reactions and refine approaches before risking capital or reputation,’ Hamaloglu explains in the EY study he co-authored.
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From guessing to knowing
For Hamaloglu, AI simulation can take advisers to UHNWs from the ‘age of guessing’ to the ‘era of knowing’.
Mainly, he explains, this is because AI can ‘uncover human bias’.
For example, surveys suggested that 70 to 80 per cent of clients’ children would continue working with their parents’ advisers. But when EY ran the AI simulation, it showed the actual number was closer to 30 per cent. A follow-up benchmark study with clients confirmed this, finding that only about 30 per cent of children continued with the same advisers.
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Hamaloglu explains that AI revealed this gap because it models behaviour ‘without peer pressure’, showing ‘what people actually do rather than what they say they would do’.
Real-world applications for wealth managers and family offices
In the wealth management and family office sectors, AI simulation can help advisers model their markets, however specific they might be. As Hamaloglu explains: ‘Whether it is a new product you want to introduce or a change in pricing, you may want to predict and understand how your clients and the market will respond. With this technology, all of that is possible in a week or two.’
The technology can support strategic planning, such as testing market entry strategies for new client segments, including UHNW clients that a firm has never served. It can also inform product design – for example, financial planning services for business owners – helping firms understand their needs and tailor offerings accordingly.
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Beyond client-facing applications, AI simulation can model internal decision-making, including preparing for board reactions to major strategic shifts or assessing how family members might respond to governance and financial decisions in family offices.
Hamaloglu notes: ‘The question AI simulation is answering is very simple: what is my client thinking about this specific subject?’
How wealth managers and family offices can implement AI simulations
According to Hamaloglu, the technology is ready to use today and already offers a cost-effective and reliable alternative to traditional surveys.
However, he warns that success depends on partnering with the right technology providers who can structure simulations around well-designed, domain-informed questions. ‘Advisers need to work with partners who have extremely deep knowledge of their industry,’ he explains.
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‘If you want the right answers, you need to ask the right questions,’ he notes.
Advisers should also prepare their internal organisations by establishing governance and control frameworks around the use of AI, as even if simulations are often run by external partners, firms remain responsible for the results. ‘[Wealth managers and family offices] aren’t responsible for the technology – that is taken care of. But they are responsible for how they choose to use it.’
