The Dow Jones Industrial Average shed more than 1,300 points earlier this month in the most dramatic drop since February. If you are a client of Morgan Stanley Wealth Management, you may have received a message from your financial advisor. The purpose of the message would be to tell you exactly what happened in the market and what the firm's investment professionals are saying about it. It would also tell you your portfolio's current probability of success in light of recent events. The email would come from your financial advisor. But behind the scenes, they are getting help from a source you might not expect: artificial intelligence.

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Morgan Stanley is one firm experimenting with how these new technologies can be applied to better manage clients' money. Artificial intelligence refers to the ability for computer science to be applied in ways that replace human intelligence. Financial firms — ranging from big Wall Street names like Morgan Stanley to robo-advisors and start-ups — are all taking a look at how tools such as algorithms, data mining and natural-language processing can help you become wealthier. Morgan Stanley formally launched its initiative — called Next Best Action — to its more than 15,000 financial advisors earlier this year. Including the firm's service employees, more than 20,000 have access to the tools. The technology works by evaluating communications with clients by emails, texts and other notes. It then applies machine learning to evaluate other ideas that can be suggested to the client. The tool could prompt your advisor to send a message when a stock you have a significant position in has been downgraded by the firm. Or if you live in the path of a coming storm — as with hurricanes Florence and Michael recently — it can send you a note with a list of helpful resources, information on your insurance rights and tips for protecting your pets. "The machine serves up those ideas to the financial advisor, and then they decide what makes sense based on their practice and the needs of the clients," said Jeff McMillan, chief analytics and data officer at Morgan Stanley Wealth Management.

Other applications

Natural-language technology is one way that artificial intelligence is being put to the test to handle human requests. This started hitting the mainstream a few years ago with Apple's Siri, which could answer task-based requests, such as "Play Taylor Swift" or "What is the weather in New York?" according Ram Menon, founder and CEO of Silicon Valley start-up Avaamo, which is providing conversational artificial intelligence to financial services firms. Now the technology is advancing to more complex questions to replace human interaction. For wealth management clients, that means the possibility of getting a more immediate response via mobile apps, websites or voice for routine requests, such as to rebalance your portfolio or sell a stock.

"While there is a lot of talk about AI is going to change the world, and it is, a lot of the changes that are happening in the wealth management, retirement-planning market is tangible, is practical and is just making the whole velocity of interactions more efficient," Menon said. Some companies are also experimenting with machine learning, where data is used to make predictions for the client. Robo-advisor Wealthfront has introduced a feature named Path, which uses third-party data and machine-learning techniques to provide answers on everything from when you can retire, how much home you can afford and which neighborhoods you can afford to live in. "If you tell [Path] that you're going to buy that $1.3 million condo in the East Village in five years, it can actually tell you, 'That's great. If you want to do that, it looks like you might have to retire a couple of years later or you could just save more," said Kate Wauck, vice president of communications at Wealthfront. "It's not siloed advice. This is the power of automation."

Human guidance

At Morgan Stanley the prompts advisors can send are aimed at helping to augment — not replace — their work. "The most powerful driver of client satisfaction are in-person meetings and phone calls with our clients," McMillan said. Those in-person conversations often involve discussing everything from investment options to more complex situations, such as handling parents who have early stage dementia or a child who has been diagnosed with a severe disability. The technology the firm is using solves two problems, McMillan said. First, it frees up more time for financial advisors to have more of those in-depth conversations. Second, it allows them to reach more people faster. So when the Dow has a precipitous drop, the machine allows advisors to message hundreds of clients at once — more than they could possibly reach individually. More from FA Playbook:

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Putting retirement plans on hold? What that means for Medicare Other companies cite examples where clients are showing a preference for automated systems over human interaction. When Avaamo worked with one undisclosed financial services firm in Asia to deploy a virtual assistant to provide life insurance quotes, the clients actually preferred that contact, Menon said. "The feedback was, 'Hey, we like the virtual assistant because it doesn't lie. It's not trying to sell me something. It's very factual,'" Menon said. Likewise, robo-advisor Wealthfront is also betting that its clients — whose average age is 32 — prefer nonhuman contact. "We don't call someone to really do anything anymore," Wauck said. "That's just an ingrained consumer preference."

Potential growth

Whether artificial intelligence will actually replace human financial advice — and how fast it does — depends on who you ask. "I think the technology is already there to replace the human," Menon said. "It's a question of adoption, as well as the seeming reluctance of the industry to let go."