While most advisors are using AI, very few are using it to its full capacity, according to Brock Sutton, head of emerging client capabilities at Capital Group, who says that they need to ask themselves key questions about the technology.
Sutton spoke to InvestmentNews at Schwab IMPACT in Boston, where AI was once again firmly in the spotlight. Earlier this week more firms joined the growing list of companies in the wealth management space that are working with AI heavyweight Anthropic.
But recent research from Capital Group points to the shortcomings around AI in the broader advisor community. Sutton explained that, while 83% of advisors are using AI in their business week over week, only 13% are using the technology for what he describes as “frontier capabilities,” such as automating workflows.
Set against this backdrop, Sutton described the core questions that advisors need to ask themselves about AI.
“What AI tools am I using? They need to be clear on that,” he said. Advisors also need a list of prioritized use cases, as well as an accountable individual that owns an AI implementation, according to Sutton.
A number of companies, such as Franklin Templeton, are using “AI champions” within their organizations to help with their deployments of the technology. Other companies are also harnessing their internal resources to fuel their AI rollouts. Raymond James, for example, is using focus groups as it ramps up the rollout of Rai, the company’s in-house AI operations agent.
Recent research from Morningstar found that 80% of advisors now use AI in some form, up from 67% last year. Some 48% percent of the advisors surveyed in the Morningstar research said that AI had significantly or moderately improved their efficiency, up from 36% last year.
At Schwab IMPACT, Sutton did note that RIAs are emerging as pathfinders with regard to AI. “I would say that your average RIA is one of the more sophisticated users of AI because of their discretionary technology decisions,” he said. Sutton cited an example that he has seen whereby firms have built custom portfolio analytics within AI tools.
“The entrepreneurship is fairly strong within RIAs and I think this correlates with them being fast movers in this space,” he added.
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InvestmentNews traveled to Boston, Massachusetts, to cover Schwab's annual conference. All coverage can be found here.
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