Written by: Dhruv Baronia |  Northern Trust Corporation

AI adoption among small and mid-sized Registered Investment Advisors (RIAs) is accelerating, but most firms are still in early stages. While 63% of RIAs now use AI in some capacity, only 10% have deeply integrated it into their operations. The key challenge? Balancing the cost of AI tools with measurable efficiency gains.

Where AI Delivers ROI

  • Time Savings: AI tools like Jump and Zocks automate meeting notes, CRM updates, and follow-ups—saving advisors hours weekly.
  • Client Service: AI chatbots and assistants reduce response times from hours to minutes, improving client satisfaction.
  • Compliance & Risk: AI platforms like Saifr monitor communications and marketing content, flagging compliance risks in real time.
  • Tax Optimization: Tools like Holistiplan automate tax return analysis and identify planning opportunities in minutes.
  • Portfolio Management: AI-driven rebalancing and risk alerts (e.g., via Orion or Advyzon) help advisors manage more accounts with fewer resources.

Phased AI Adoption: A Practical Roadmap

To manage costs and maximize ROI, RIAs should adopt AI in phases:

Phase 1: Assess & Prioritize

  • Identify operational bottlenecks (e.g., manual data entry, meeting prep, compliance reviews).
  • Define clear goals (e.g., reduce onboarding time by 40%, save 5 hours/week per advisor).
  • Audit your tech stack for integration readiness (clean data, open APIs, CRM/portfolio system compatibility).

Phase 2: Pilot Low-Risk Tools

  • Start with affordable, high-impact tools:
    • ChatGPT or Microsoft Copilot for content drafting.
    • Jump or Zocks for meeting automation.
    • Catchlight for lead scoring and prospecting.
  • Use free trials or low-cost plans to test value before scaling.

Phase 3: Measure & Iterate

  • Track time saved, error reduction, and client feedback.
  • Compare costs vs. efficiency gains (e.g., $65K/year savings per advisor from automation).
  • Adjust workflows and train staff to maximize tool usage.

Phase 4: Scale & Integrate

  • Expand successful tools across teams.
  • Integrate AI into core systems (CRM, planning, compliance).
  • Consider outsourcing complex functions (e.g., AI-powered OCIO services) to reduce overhead.

Key Actions RIAs Can Take Now

  • Start with one AI use case that solves a clear pain point.
  • Use free or low-cost tools to experiment (e.g., ChatGPT Plus at $20/month).
  • Partner with vendors offering bundled or white-label solutions.
  • Join advisor networks or custodians offering AI tools at group rates.
  • Focus on tools that enhance—not replace—human advice.

Related: High Dividend Yields From BDCs Signal Mounting Stress Behind AI Financing