Financial advisers' attitudes toward next-generation technology like artificial intelligence are quickly changing.
About 84% of advisers see the potential for AI to deliver better client experiences, according to a new survey from Forbes Insights and Temenos, a company that provides software to banks.
In particular, firms believe AI will be important for cybersecurity, portfolio returns and client communication.
"Machine learning is a powerful approach to identifying fraud and identifying both opportunities and anomalies," said Jeff McMillan,
Morgan Stanley chief analytics and data officer, in the report. "The machine can look at billions and even trillions of historical activities and make informed correlations. It sees what's working for you and what's not, and then it gives you more of what works and less of what doesn't."
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One third of advisers see AI as a "game changer" in the industry and are actively working to deploy it at their firm, the survey of 219 executives at wealth management firms found. A quarter are testing AI solutions.
Not a single one surveyed said they have no interest at all.
About 52% of advisers said they view digital technologies as an essential part of doing their job in the 2018 survey, that's up from about a quarter of advisers in a comparable 2016 survey.
Paul Ewing, president of
Prosperity Advisory Group, attributes the changing perception to a better understanding of the capacity and limitations of new technology.
"Initially, [AI] was presented as though it would replace what we do, and I don't think that's at all the case," Mr. Ewing told
InvestmentNews.
He believes the tech will augment what advisers do and help them respond to increasing demand for financial advice.
"The reality is the small, boutique, dream practice of having 50 to 100 clients that were just mega-clients and you could just phone it in from the beach — I don't think that's the practice of the future."
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Though he envisions plenty of uses for AI in his practice, Mr. Ewing doesn't think there is a product on the market yet that is far enough along to warrant a serious investment.
The Forbes and Temenos study reported 67% of high-net-worth clients want their wealth manager to adopt some form of AI, but Mr. Ewing said that is not the case with his clients. While they want the firm to have high-tech solutions, his clients don't want to be forced to use it themselves.
"Our clients still want that bespoke experience," Mr. Ewing said.
Prosperity's advisers, on the other hand, are looking for AI and other technologies to help them grow their capacity, he said.
