• 45% say artificial intelligence (AI) will help advisers serve clients more efficiently
• 32% think AI will revolutionize the financial advice sector
• 31% say advice firms not embracing AI will be competitively disadvantaged
• 31% think AI will reduce advice fees, while 10% say it will reduce financial mis-selling
• 26% say their firm is looking to harness the powers of AI
• 19% think AI will replace much of the work done by human advisers
A third of advisers think artificial intelligence (AI) will transform their industry but one in five think the technology will replace the work they do, research shows.
A CoreData study of 267 UK financial advisers found 32% think AI will revolutionize the advice sector. This increases to four in 10 (40%) advisers focused on high net worth (HNW) clients.
The study highlights a number of benefits that advisers think will come from AI technology. Nearly half (45%) say AI will help advisers serve clients more efficiently, while almost a third (31%) think it will reduce advice fees. A smaller proportion think the technology will reduce financial mis-selling (10%).
Given these expected advantages, a quarter (26%) say their firm is looking to harness the powers of AI. And three in 10 (31%) say advice firms not embracing AI will be competitively disadvantaged. The survey findings indicate advisers serving wealthier clients are stronger advocates of AI and see greater benefits from the technology. More HNW advisers say it will help serve clients more efficiently (59%) and a greater proportion think advice firms not embracing AI will be competitively disadvantaged (47%). In addition, far more HNW advisers say their firm is looking to harness AI (43%).
The appetite for AI underscores a wider focus on advice tech. Four in 10 (39%) respondents agree their firm needs to spend far more on advice tech to stay relevant. This comes amid expectations that new regulations will spur technological development. A fifth (20%) say the FCA’s Consumer Duty will see greater advances in adviser technology than the Covid-19 pandemic. This rises to 25% of HNW advisers.
But the study, conducted in August, also shows advisers are concerned about the potential dangers posed by AI. More than two in five (42%) think it raises serious risks for advice firms in terms of client confidentiality and data protection. And over a third (35%) do not trust the information produced from AI. Mass market advisers are more concerned about client confidentiality and data protection (47%).
Furthermore, some respondents see AI as a threat to their jobs, with a fifth (19%) saying it will replace much of the work done by human advisers. This increases to 26% of mass market advisers.
“While advisers harbour concerns about AI, they also recognize its potential to positively transform the industry,” said Rory Wilson, managing Director, UK and US, at CoreData. “AI offers many opportunities for advice firms including automating tasks, managing data, assessing risk and complying with regulations. All of which could allow advisers to spend more time with clients and put into use those essential soft skills, including empathy and reassurance, which cannot be replicated by technology.”
