One of the hottest topics in financial advice in the past couple of years is the potential impact artificial intelligence (AI) tools will have on the industry. On the one hand, AI tools could be seen as a threat to human advisers if companies are able to leverage these tools to provide high-quality advice for a fraction of the price of human advisers. On the other, AI tools also have the potential to empower human advisers to provide advice more efficiently, allowing them to lean into their strengths as humans (e.g., understanding clients' needs and making them feel heard).
A recent survey sponsored by adviser software firm Orion of 206 advisers on its platform reflects these dueling perspectives, with 33% of firms indicating they are already using AI and 42% currently evaluating/testing AI, while 36% of respondents indicated they are fearful about implementing AI in their firm (perhaps concerned in part about the need to balance AI use with relevant regulatory compliance requirements). Overall, 46% of respondents said they plan to leverage AI for the strategic direction of the firm in the next 3 years, though only 28% of respondents indicated that they are very knowledgeable about how to apply AI to their business).
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In the end, while AI and related software tools have received significant hype during the past couple years, it's still the early stages for AI-enabled tech and the greatest impacts for advisers could be a decade away. That said, tech-forward advisers currently have several ways to take advantage of the current slate of AI-powered tools, from large language models like ChatGPT to brainstorm content creation ideas and create first drafts of emails to software that facilitates client meeting notetaking to "Custom GPTs" that can fulfill some of the tasks that an adviser might most want to get off of their plate.
Read: 1/3 Of Firms Currently Using AI, Similar Number Fearful Of Implementing It: Orion Survey
The above originally appeared in 'Weekend Reading for Financial Planners' on Kitces.com October 4, 2024, and is reprinted here with permission.
About the author: Adam Van Deusen, CFP
Adam is a Financial Planning Nerd at Kitces.com. He previously worked at a financial planning firm in Bethesda, Maryland, and as a journalist covering the banking and insurance industries. Outside of work, he serves as a volunteer financial planner and class instructor for local and national non-profits.