Advisors are increasingly hip to the lead, follow or get out of the way nature of artificial intelligence (AI) as it relates to deployment within practices. Wealth managers are also taking a pragmatic view of AI at the practice level.
That is to say that while they see potential and value in this disruptive technology, they’re not approaching with a Wild West perspective. Yes, advisors want AI to bear fruit for their practices, but they also want to ensure they’re in control of the technology, not the other way around.
“The latest research from wealthtech provider Advisor360°™ reveals that financial advisors are upbeat about the role that artificial intelligence (AI) can play in their workday, while remaining clear-eyed about the need for oversight,” notes the research firm. “Seventy-four percent say AI already helps their practice, but 93% say retaining control over decisions and advice when using AI tools is non-negotiable.”
Advisors’ perspective benefits them and clients alike because clients have made clear that while they want advisors to be tech-proficient, they also want to know that a human is actually managing their money.
AI as a Client Engagement Tool
Advisors can likely stop worrying about being replaced by robots, but they should consider the potency of AI as a client engagement tool.
For example, the popular ChatGPT generative AI platform can synthesize client meeting transcripts into digestible bites while efficiently setting the agenda and to-do list for the next meeting. Additionally, ChatGPT is a viable tool for generating thematic content and social media posts – two endeavors that many advisors don’t feel are among their core strengths.
For clients, the added good news is that, according to the Advisor360 study, just 14% of advisors tap AI to identify investment opportunities and just 3% use the technology to act on specific AI-generated recommendations. Wealth managers are, however, using AI to improve their practices in other ways.
“Advisors already use AI-enabled tools to tackle administrative tasks more efficiently, including generating meeting summaries and notes (31%), updating CRM records (28%), preparing for client meetings (26%), and managing routine client communications (25%),” notes Advisor360.
Advisors Keeping AI Adoption on the DL
One surprise in the survey is that advisors are quite discreet about their embrace of AI.
“Despite high adoption, few advisors are comfortable discussing their AI use with clients. Just 21% proactively raise the topic with clients, and less than half (49%) will do so if asked. Thirty percent avoid mentioning AI altogether,” according to the study.
That’s an interesting state of affairs and one advisors should rethink because scores of studies confirm clients, particularly the younger ones, want to know their advisors are using the latest technology.
“For most advisors, confidence in AI-native tools—and their comfort discussing them with clients—comes from knowing the technology is operating within clearly defined guardrails,” notes Mat Mathews, Chief Product & Engineering Officer at Advisor360. “As these frameworks mature and real-world outcomes continue to validate the technology, advisors will begin to see AI not just as a helpful assistant, but as a reliable, trusted teammate.”
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