Can generative AI help advisors with personalization?

A new survey from Totumai, a technology firm dedicated to enhancing advisor-client communications, offers a fresh perspective on the shifting financial advisory landscape, particularly with respect to using generative AI.

In a joint study with research firm 8 Acre Perspective, Totumai surveyed 100 financial advisors to understand the challenges they face and how AI could help address them.

Among the advisors they polled, around half (54 percent) find it hard to find time for each client, and a little more than two-thirds (68 percent) wrestle with scaling their practices effectively.

Amid these challenges, advisors are shifting their priorities. Only 25 percent of the respondents expressed a desire to spend more time on investment management, compared with 66 percent who prioritized client-facing activities and 45 percent who want to double down on prospecting and marketing efforts.

Tellingly, an overwhelming 96 percent of advisors acknowledging the importance of personalized interactions. In spite of that, only 10 percent said they have achieved this level of customization with all clients, and 29 percent admitted they had little or no personalization in their client engagements.

"Meeting consumer expectations for greater personalization can be challenging, but also represents an opportunity for the financial services industry to come to parity with other parts of consumers’ lives," said Jim Neuwirth, president of 8 Acre Perspective. "Take the streaming services – they curate our experience and learn more about us as we select what we want. This is the personalized experience consumers are used to.”

Delving into advisors’ adoption of AI, the survey found only 12 percent are utilizing AI, but 48 percent have plans to incorporate this technology into their operations. Another 40 percent, however, said they have no intention of adopting AI.

Among those advisors planning to incorporate AI into their practice, a majority said they would use the technology in client communication (65 percent) and prospecting and marketing (45 percent), implying a focus on enhancing relationships and growing their client base.

"We believe generative AI is the answer. Early adopters will have a massive advantage over their competition that are either unwilling or unable to embrace it,” said Totumai CEO Matt Schiffman. “Most importantly, it has the potential to let advisors customize client engagement to a granular level, vastly improving the investor experience and deepening client relationships at scale."

Despite the opportunity, there are still barriers to adoption. Three-fifths of participants (58 percent) agreed compliance would be a concern, and nearly half (49 percent) highlighted the need for education and regulatory guidance around the use of AI in wealth management.