Artificial intelligence is rapidly reshaping the financial planning landscape, promising both sweeping efficiencies and new challenges for advisors and their clients.
That, in a nutshell, was the consensus at a virtual panel hosted by CFP Board on Tuesday, where experts from its AI Working Group shared their perspectives on the future of financial planning in the era of artificial intelligence.
AI is already automating many of the routine and analytical tasks that once consumed advisors’ time, freeing them to focus on what truly differentiates human professionals: empathy, judgment, and personal guidance.
“AI is going to replace a large part of what we do,” said Andrew Altfest, founder and CEO of FP Alpha. “It’s going to take tasks off our plate, like scanning tax returns or modeling estate scenarios, but it’s not going to replace the trusted role that we play. In fact, I think it’s going to free us up to do what only humans can do.”
Brooke Juniper, CEO of Sage, echoed this view, emphasizing how it can scale the impact of the planning profession.
“The headline impact that AI is going to have on the industry is more advice for more people. And it’s tremendously exciting," Juniper said.
A recurring theme was AI’s potential to broaden access to quality financial advice. With growing fears of an advisor shortage in the next decade, AI has the potential to bring advice to a much broader swath of the population.
“It will elevate [advisors’] role and they will be able to serve more clients with their expertise," Juniper said. "So the things that might take hours going through paperwork and migrating things between different systems, all of that stuff that your paraplanner hates to do ... will go away.”
For Altfest, AI will put higher-value services that have traditionally been reserved for upper-net-worth clients within more clients' reach.
“It’s going to democratize what the wealthiest have always had access to, bring it down to more clients so that we can advise them more broadly," he said.
Despite AI’s growing capabilities, the panelists were unanimous that trust and human connection remain irreplaceable in financial planning.
"AI is not going to replace the judgment and the trust that a human planner will provide you," said Apoorv Saxena, CEO and co-founder of Obin.AI, a soon-to-be-launched fintech platform.
Recounting his time at JPMorgan, he said the firm deployed AI to simulate portfolio outcomes under different scenarios. While clients loved the efficiency of the algorithm, they didn't trust the output until an advisor walked them through the implications for their lives.
"It's not about maximizing returns. It's more about, how do you make the trade-offs between your values? ... Whether you make a decision to retire early or take care of your aging parents, [or] supporting children versus philanthropy," he said.
As AI takes over more administrative tasks, the roles of support staff and back-office workers may shift, while client-facing professionals will have more opportunity to focus on delivering expertise and building relationships.
“For people who are interfacing with the advice part, it’s going to make them a lot more scalable,” Juniper said. “It will elevate their role and they will be able to serve more clients with their expertise.”
To get the quickest early wins from their AI journey, she encouraged firms to identify tasks that involve a high degree of data analysis, or require a lot of repetition.
“Look for processes that are complex, where AI could help you analyze faster,” Juniper advised. “Or processes that have a lot of volume, things that you need to do over and over.”
Altfest also stressed the importance of the human element in adoption, particularly when it comes to fears about job replacement.
“There’s going to be fear about, 'Is this going to replace my job?'" he said. "If you don’t address that in the beginning, then you could get resistance to an AI initiative. ... You have to have executive buy-in in a project like this as well.”
For Saxena, firms looking to use AI in their organizations have to keep accountability in mind. That means having the ability to verify the results it produces.
“The number one rule of thumb is if AI cannot explain how it got the answer, you don’t deploy the AI,” he said. “Explainability and auditability are the two key phrases we use … to build that trust.”
“Anyone assessing an AI [solution] needs to understand how it works," Juniper echoed. "Where does the data come from? How is it coming up with responses? Your technology provider should be able to answer that question really cleanly and clearly.”
While the pace of AI development is accelerating, the panelists remain optimistic that the future of financial planning will be defined by a powerful partnership between humans and machines.
“There will be pieces of the profession that will be completely automated in ways we have not even imagined," Saxena said, "but that does not obviate the need of the true value that the profession provides.”
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