The incorporation of AI in financial advisory is progressing, but compliance issues persist.
- AI tools are increasingly used in onboarding and suitability reporting.
- Over half of financial advisers call for enhanced compliance to leverage AI.
- A significant majority foresee future advice being delivered online.
- Experts stress the importance of psychology in maintaining adviser relevance.
Artificial intelligence is becoming a cornerstone in the financial advisory sector, yet concerns over compliance continue to surface. While AI offers transformative potential, more than half of advisers are pushing for improved compliance to fully harness its benefits in advice delivery. This sentiment was echoed at the Artificial Intelligence in Financial Advice conference, highlighting both opportunities and challenges.
AI technologies are progressively being utilised for various functions such as client onboarding and generating suitability reports. Two years post the introduction of AI tools like ChatGPT, their application in the advisory realm is expanding. However, for AI to reach its full potential in this area, compliance processes must evolve concurrently.
A survey conducted at the recent conference indicated that approximately 66% of attendees believe that online platforms will become the primary mode for delivering financial advice, although about 33% of advisers still value regular face-to-face interactions with clients. This trend reflects a shift towards digitalisation, but underscores the persistent need for personal engagement.
The potential of AI in financial advice is indisputable, as stated by Ian McKenna, who described it as both an opportunity and a threat. He suggests that AI could bridge the advice gap, anticipating that technical financial advice might become freely accessible within a decade. However, he cautions advisers to cultivate skills in psychology and behavioural science to remain pertinent.
A staggering 97.4% of advisers intend to increase their AI usage, expecting gains in efficiency and service quality. This readiness to embrace technology speaks volumes about the direction in which the industry is heading, yet it also flags the essential role that effective compliance will play in this evolution.
AI is reshaping financial advice, but compliance improvements are crucial to maximising its potential.
