Does more AI use mean more clients? Think again

Young advisors are eager to keep up with the digital age.

A recent survey from digital financial advisor Betterment found that nearly three quarters of the independent advisors surveyed were millennials, which aligns with the growing needs and value of attracting millennial investors. Additionally, AI and technology are widespread. Four out of five advisors surveyed use AI in some capacity, and among those who don’t, 64 percent intend to.

Alicia Rich, head of client and advisor digital enablement at Broadridge Financial Solutions, believes one of the best uses for AI is that it can help a firm to scale.

“If you use them in the correct ways, they can eliminate a couple of hours a week that you might be doing to prepare for a conversation,” she says. “You can feed into that process, and it’ll help you have two additional meetings a week because you're saving a little bit of time.”

However, she cautions that it doesn’t mean advisors will be able to take on more clients. “It's great that we're eliminating these manual and administrative tasks and making teams more efficient but how can we start to think about using the technology so that an advisor could scale and could support more clients?

“I think we're still at a point in early days to understand what's it going to take to allow them to have more clients,” she added.

Rich’s comments solidify Betterment’s survey as findings show tech allows advisors to offer better client experiences. 43 percent of advisors surveyed said that with more time, they would spend more hours on financial planning and meeting with current clients.

Adrian Johnstone, CEO of Practifi, a performance optimization platform, highlights one of the challenges the industry constantly faces is that communication among clients is often reactive.

“Technology can play a real role to get upstream of that, to aggregate enough data that it can be proactive,” he said.

Technology – and AI - can also go so far as to suggest a point of contact and even automate a large part of that contact before the advisor or the client has had to think about it, notes Johnstone.

Johnstone also points to a recent FINRA survey that made one thing clear: clients want to talk to advisors.

“They don't want to talk to AI tools. So how do we free [up] the advisor to know who to talk to, when and about what? That's where technology can make or break the value metrics for a firm.”

He emphasizes that technology should not be seen as a barrier, but rather as a tool to enhance the advisor-client relationship.

"The human element is the bit that I hope we don't get away from. The role of technology needs to be to feed advisors information."

In the end, despite advisor’s best use cases for technology and AI, clients serve as a critical reminder of that’s who they serve. Oftentimes, clients won’t be going to AI for help; they’re still calling up their advisor, notes Gabe Rissman, co-founder of YourStake.

“It's a person that they trust and it's someone that knows the full context of their financial picture. They’re someone that isn’t just going to agree with everything that they say,” he says.

Rissman says it serves as “a fantastic example” of where advisors truly provide value above the AI tools of today. When there's adaptive, on the spot thinking and reacting to clients’ [needs and worries], advisors still have a big leg up.

“Advisors powered by AI, even more so,” he added.