How AI is changing financial advisors' jobs

Artificial intelligence doesn't appear to be eliminating advisor jobs, but it's certainly changing what human advisors do at their job on a daily basis.

Most of the AI tools advisors currently use are that of a virtual assistant for back-office functions, like providing automated meeting notes, document intake and portfolio summaries. Manually managing portfolios or contracts across accounts has become more seamless and automated, saving time for advisors who are now finding themselves in different tasks as their role quickly evolves.

READ MORE: The easy AI tools that any advisor can use

John Mackowiak, chief revenue officer of wealthtech platform Advyzon, recalled roughly 20 years ago when an operations manager would spend hours of their day loading data into their firm's reporting systems.

"And then the current generation of portfolio management systems came along … and the operations manager sitting there was like, 'Shoot, what am I going to do?' Well, the operations manager now gets to help with marketing or they can manage more clients, generate more revenue," he said. "Because that person is a linchpin of the business. A job doesn't go away. The job is very different."

READ MORE: For financial advisors, is AI a job taker or maker?

So, what will the future human advisor role look like?

For starters, clients are demanding more because they are exposed to more financial options and needs through technology. A recent survey of 1,000 high net worth individuals conducted by Boosted.ai found that 82% claim to be AI proficient, and 79% strongly or somewhat agreed that they'd like their financial advisor to take advantage of AI tools.

This means advisors will need to focus even harder on building those client relationships while also showing they're technologically adaptable.

Clients "want holistic advice for the same cost, if not less, that's faster as well as being smarter. So demands are pretty high," said Sachin Shah, chief operating officer of 55ip, an automated tax technology platform owned by J.P. Morgan Asset Management. "And that's where we're going to need to have this co-piloted relationship between the human and the tech."

A new survey of 270 wealth managers conducted by Financial Planning found that 43% said AI-based technologies will play either an "extremely important" or "very important" role in their firm's efforts to capture new clients and/or retain children inheriting wealth from existing clients. 

"If you're not using AI now and getting educated now, you are going to be left behind because everybody else is moving a lot faster than you are," said John O'Connell, founder and CEO of The Oasis Group, a tech consultant for advisory firms.

However, that does not mean advisors will be out of a job — the same way the rise of robo advisors during the past decade did not eliminate human advisors. 

"We saw this a little bit with the robo advisor space, that kind of failed attempt, and I think the result of that was people still like that human interaction," said Mike Ursitti, senior vice president of business development at Advyzon Investment Management. "It's just the way that advisors interact with their clients."

According to the Boosted.ai survey, another 50% of respondents also said they prefer an advisor who uses both traditional methods and AI tools to manage their money.

"Generative AI may enable wealth advisors to spend more time on strategic planning and personalized client service, ultimately increasing productivity and client satisfaction," said Craig Robson, founding principal and managing director at Atlanta-based Regent Peak Wealth Advisors. "Yet what is truly missing from the response is the human element which AI will not replace."

Part of the new human advisor role will be monitoring the output of the AI tools being used to ensure the response is accurate and complete. Most AI tools to date are running off large language models that are widely known to hallucinate, or give perfectly curated but inaccurate responses. So it's up to advisors to be the monitor, or final editor, of these tools.

READ MORE: Advisors know ChatGPT, but that doesn't mean they trust AI

"AI has hallucinations, and the problem is not solved yet. First, you need to verify everything and that takes time," said Christophe Gauthron, CEO of Kwanti, a digital portfolio analytics provider based in San Francisco. "I don't think that many jobs will be lost until this is reliable AI. But we're very far from that."