Humans typically reject new technology, at least initially. Cars were killers and electricity sorcery, and so it is with artificial intelligence (AI), a Skynet-supported superintelligence network that will doom us all.
Or maybe not—at least with financial advice.
Integrated wealth management tech firm Advisor360° found that 64% of younger advisors call generative AI “a help” to their practice, while 57% believe it is a benefit to the industry.
Advisor360°’s 2024 Connected Wealth Report: AI & the Next-Gen Advisor looked at how the next generation of financial advisors perceives AI. Only 21% of advisors surveyed consider generative AI to be a threat to their personal livelihood and 31% call it a threat to the industry.
“The up-and-coming generation of financial advisors sees generative AI tools as potentially effective for growing and managing their businesses,” Darren Tedesco, President of Advisor360°, said in a statement. “Advisors are looking to AI to take on administrative and operational tasks so they can focus on higher value activities, like meeting with current and prospective clients.”
The survey indicated that a new reality is beginning to form around the way advisors work with their clients, as the adoption of generative AI tools has been fast and far-reaching.
In fact, 83% of respondents already have access to tools with natural language generation (NLG) technology (e.g., ChatGPT), but only 44% say they currently use them for client communications.
AI Usage Guidance
Having access to these tools and using them are two different things. Advisors’ top challenge with generative AI is that they are hamstrung by firm policies on the technologies they can use. Their frustration is evident: while nearly all respondents (97%) say their firms have AI strategies, 43% say advisors should be more involved in shaping them.
More than half (53%) of advisors say their firms do not have established policies on how to use generative AI, though firms seem to be working to address this. Already 27% of advisors surveyed say generative AI policies are in development at their firms.
Wealth management firms may be slow to develop policies in the absence of clear guidance from regulators. The advisors surveyed say a more concrete direction is needed, with 68% asking for specific regulatory guidance around AI. Only 32% of respondents believe existing rules will suffice in the future.
“The wealth management industry has only started to scratch the surface on what generative AI can do,” Tedesco concluded. “Firms with the right systems in place joined with comprehensive and clean data can expect to realize mammoth gains in efficiency, as generative AI is able to tackle more streamlined processes and automated tasks faster and with fewer errors.”
