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Areas of Emphasis for Advisors Considering AI
Artificial intelligence (AI) is making substantial inroads in the financial services industry and that includes the advisory business. However, levels of AI adoption vary from practice to practice with many principles taking a wait-and-see approach.
Many cite costs, educational needs or the ability to identify exactly where AI can be best deployed within an advisory firm as the primary headwinds to near-term adoption. To be sure, all plausible reasons. Still, various surveys indicate advisors are bullish on AI’s long-term trajectory and believe it will positively benefit the advisory industry.
So it’s clear that AI is can be a boon for financial services companies and advisors, but what about customers/clients? Data confirm they’re using AI for a variety of personal finance functions and that good news for AI enablers as well as the financial services firms embracing the technology.
Likewise, advisors that are mulling deeper AI integration in their practices should consider that it could be a great way of converting younger prospects into clients. An encouraging sentiment, but advisors still need to know how to hone their AI approaches.
Make Clients the Center of AI Integration
Clients are the heartbeat of any practice and there are avenues through which AI can increase client retention and service. Those include leveraging the technology to provide market updates and sift through data points to provide investment-related insights.
No, that doesn’t mean using AI to select individual securities. The most accessible forms of AI aren’t there yet in terms of being proficient stock-picking tools, but existing forms of generative AI can provide customized reports to clients. The technology can also improve automated customer service.
“AI-powered chatbots and virtual assistants can handle routine client inquiries, freeing up humans for more complex interactions,” according to Nationwide. “These AI tools can provide instant responses, handle multiple queries simultaneously, and operate round-the-clock, thus enhancing customer satisfaction and operational efficiency.”
Generative AI is also a boon for advisors that hate writing and those that view drafting marketing pieces as a drag.
“Generative AI can help you create marketing materials for your practice and can help you brainstorm, draft copy, create subject lines, perform keyword research, write blogs, design infographics and video, and more,” adds Nationwide.
Nitty Gritty AI Concepts
AI can do more to improve day-to-day operations for advisors. While it should not be relied upon to select individual securities, the technology can be deployed in the analysis of financial market and economic data. Advisors can harness those outcomes to build more diverse, sturdier portfolios for clients.
Additionally, AI can be tapped to improve safeguarding of client data. Think about it. Advisors have access to scores of client information that can be used by bad actors to perpetrate fraud. Should the worst case scenario occur, it might not be the advisor’s fault, but trust could be lost. AI can assist in preventing those nightmares.
“AI can significantly enhance risk management through advanced modeling techniques that detect and mitigate potential threats,” concludes Nationwide. “Machine learning algorithms can identify unusual patterns and anomalies in transaction data, thereby flagging potential fraud much earlier than traditional methods. This not only protects clients' assets but also builds trust and reliability in your services.”
Related: AI and Tech Are Shaping the Future for Financial Advisors