Advisers slow on on AI uptake, but interest persists
Just 11 per cent of financial advice firms have trialled the use of artificial intelligence (AI) in their businesses, but almost half say they are ‘AI interested’, according to Netwealth.
In its latest AdviceTech report, the firm interviewed 102 financial advisers and said artificial intelligence has not yet been widely adopted by the financial advice market.
Some 11 per cent have piloted AI in limited use cases, but 34 per cent said they were exploring it.
They expected to use it mostly for marketing and client services purposes while just over half were exploring using it for admin and advice and 17 per cent were using it for compliance and security. The use for compliance purposes includes identifying fraud and cyber breaches or regulatory and compliance breaches.
“In terms of business impact, advice businesses that are ‘AI interested’ hope AI in the next two to five years will lead to: improved efficiencies in their business (100 per cent), cost savings (74 per cent), improving accuracy (70 per cent) and regulatory compliance (57 per cent) and a better ability to deal with fraud and cyber threats (50 per cent),” it said.
“Improved productivity of staff is a hope for many ‘AI interested’ firms, identifying improvements in productivity (67 per cent) and the creativity of staff (39 per cent), with only a small fraction thinking it will help reduce headcount (15 per cent).”
Breaking the data down further and focusing on financial advice, the top three areas where respondents felt AI could add improvements were in preparing the initial financial plan, defining the initial scope of engagement, and in the client review process.
Some 60 per cent said preparing the initial financial plan, which includes creation of a statement of advice, will be impacted most by the technology. This includes using AI or ChatGPT to refine advice documents into a more relatable and readable document with improved grammar and diagrams.
In contrast, the area they felt would be least affected is finding and prospecting for new clients that was cited by just 12 per cent of respondents.
Other uses for AI include investment execution at scale such as automated records of advice, investment research by analysing real-time market data and financial news, algorithmic trading and portfolio thematics to identify companies based around a particular theme, and digital advertising.
AUTHOR
Laura Dew
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