No technology in recent memory has done more to capture our imaginations—or has more potential to transform our industry—than artificial intelligence. In the headlines, it’s a double-edged sword, raising concerns over cybersecurity and personal data, at the same time that it raises the bar for service and satisfaction to new heights. Advisors need to take hold now, or be left behind, because early adopters already have the upper hand.
According to our most recent
Among these high performing early adopters, nearly 9 in 10 have added more AI-driven technology into their practice in the past 12 months — and over 8 in 10 plan to add even more in the coming year. In an industry where all advisors must manage increasing amounts of disparate data from multiple sources on a daily basis, early adopters use AI to make the complex simple.
AI helps them assess and organize big data, identify patterns and trends, and evaluate a vast range of scenarios so they can make more accurate predictions and arrive at decisions with a greater degree of certainty. Deploying AI also allows them to automate back-office operations and routine tasks, so they can focus on the 20% of high value activities that drive 80% of revenue creation. AI not only creates more time for them meet face-to-face with clients, it also enhances the quality of these meetings.
There is no ignoring how retail giants such as Amazon and Apple have used use AI to create greater convenience, enhance ease-of-use, increase customer satisfaction and capture market share. Once the secret weapon of large institutions with deep pockets, billion dollar hedge funds, and Silicon Valley innovators, AI is now an accessible and cost-effective solution that will change the way RIAs and fee-based advisors work.
And the timing is right. In today’s digital economy of instant access to everything, clients are starting to expect their advisors to deliver the same anytime/anywhere service model. They want financial advice to have the seamless intuition that online retailers like Amazon already offer. That’s why the most successful advisors already deploy AI — to keep pace with the customer experience of retail giants, and gain an edge to win more clients.
Likewise, 9 in 10 early adopters, and two-thirds of RIAs and fee-based advisors, say that using AI tools will create a competitive advantage. AI opens the door to new segments of clients, new categories of products and services, greater transparency, simplicity, lower costs and more choice. And as AI continues to become exponentially more powerful, integrated and intuitive, at the same time that it becomes less expensive, it will allow greater adoption across firms of all sizes and every level. As our study reveals, creating this competitive advantage comes from focusing on three key areas: leveraging AI to improve the client experience, harnessing AI to expand your business, and bridging the AI divide.
While it might seem counterintuitive, our study has shown that the most immediate benefit of AI is to enhance the human connection. In fact, nearly 9 in 10 early adopters and two-thirds of RIAs and fee-based advisors say that integrating AI with financial planning will improve the advisor/investor relationship.
Artificial Intelligence allows you to provide each client with a unique one-on-one experience. You respond to your client's needs potentially before they even know that they have them. When AI and advanced analytics underlie and integrate every element of the client experience — your website, client portal and account management platform, even the emails that you send and the calls that you make — you can capture data and develop predictive profiles of your clients to understand what matters most to each one.
Year over year, RIAs and fee-based advisors say adding new clients is the number one way to drive greater growth and greater profitability. And year over year, investors at every level from the mass affluent to the ultra high-net-worth say that personalized, holistic financial planning is among the top three factors for choosing an advisor.
AI tools can help you attract new clients and retain existing clients by helping you understand their current needs, make more accurate predictions about their future needs and provide them with more personalized, holistic financial planning. Likewise, 9 in 10 early adopters and nearly three-fourths of RIAs and fee-based advisors agree that AI will help them select the right products to achieve clients’ financial goals.
When it comes to integrating AI with financial planning, investors say that their top three concerns include cybersecurity risks, privacy concerns, and worries that AI gives technology too much autonomy. Take action to bridge this AI divide. Establish clear and transparent policies for cybersecurity and the protection of your clients’ personal data. Regularly engage clients to make sure you understand their concerns, and to make sure that they understand all of the important work you are doing in data protection and cybersecurity — thereby turning their fears into a potential competitive advantage.
