How are advisers using AI to improve client experience?
As artificial intelligence (AI) continues to reshape how the advice industry operates, Adviser Ratings unpacks how advisers are implementing these technologies to improve the client experience.
AI is increasingly becoming a “staple tool” for financial advisers, according to the research firm, as advisers utilise it to streamline business operations and reduce costs.
A recent survey conducted by Adviser Ratings gauged how advice practices are adjusting to the new way of operating, as well as how they perceive AI.
The research discovered that customer management-related tasks are the primary focus regarding the perceived utility of AI within practices.
“Leveraging AI in these areas can enhance client interactions, personalise services and optimise marketing efforts, thereby improving overall efficiency and effectiveness while reducing costs,” Adviser Ratings wrote.
Some 47 per cent of advice practices are adopting AI for client engagement, such as newsletter production. This is followed by marketing at 43 per cent, statement of advice (SOA) or record of advice (ROA) production at 41 per cent, and portfolio management at 12 per cent.
“Embracing AI isn’t just about competitiveness; it’s leveraging technology to serve clients better and navigate modern finance complexities. Building trust and understanding among advisers and clients will be crucial in unlocking AI’s full potential and ushering in a new era of personalised, data-driven financial guidance.”
The research house also revealed that fewer than 50 per cent of practices have utilised or are considering implementing AI tools into their advice services. However, this percentage differed significantly depending on the size of the business.
Approximately 70 per cent of larger advice firms have either adopted or are considering AI integration, compared to 40 per cent of practices with a single adviser.
“This suggests that resource availability and implementation costs may be influencing adoption rates.”
Consumer views towards AI
Moreover, the survey discovered consumers’ attitudes towards effects of AI on financial advice, with nearly 75 per cent believing that AI will have some degree of effect.
“While consumers don’t foresee AI replacing financial advisers entirely, they anticipate it will assist in their work, ultimately reducing consumer fees and fostering a win-win scenario.”
Some 35 per cent of consumers said AI will help advisers, while 27 per cent believe it will have no effect, and 26 per cent expect AI to help reduce advice fees. Just 14 per cent said AI will replace advisers.
“There are notable differences between consumer profiles and their perceptions of AI. Pessimistic individuals are more likely to believe that AI will not have effects, whereas those who are more optimistic envision a scenario in which advisers will be assisted by AI tools.”
Looking ahead, Adviser Ratings encouraged both advisers and clients to embrace AI’s potential benefits while also recognising any concerns.
“Education and awareness about AI capabilities and limitations will be essential in fostering trust and encouraging widespread adoption. Additionally, ongoing research and development efforts should prioritise ethical considerations and the protection of consumer data to ensure responsible AI utilisation within the financial sector.”
AUTHOR
Jasmine Siljic
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