Financial advisors already finding answers with AI as they look to the future

Generative AI will never be able to replace the intimate human relationships advisors have with clients. But it will make advisors’ lives a whole lot easier.

In fact, it already has.

Artificial intelligence may seem like a brand-new technology as a result of the recent hype, but Scott Reddel, capital markets and wealth management managing director at Accenture, says incorporating AI into wealth management is hardly a new idea. He points to an Accenture report released four years ago that showed more than 90% of advisors wanted to adopt AI capabilities into their practices because they thought it could grow their business by 20% or more.

And those capabilities have certainly improved over the past four years.

“What’s been really powerful about Gen AI is not just the automation of mechanical tasks, but its ability to embed a degree of intelligence and judgment that advisors typically have had to do themselves,” Reddel said.

Some of those tasks now include preparing presentations for clients and querying service requests about different types of activities, as well as answering numerous ad hoc questions coming into the firm.

“As it becomes clearer as to how this technology will be regulated, we plan to incorporate AI in our day-to-day work to accomplish easy tasks so that we can remained focused on what we are best at, which is working one-on-one with our clients,” said Brian Hartmann, partner at Granite Bridge Wealth Management, part of Osaic.

Still, Hartmann advises wealth managers to proceed carefully when it comes to adopting AI into their firms’ daily practices so as not to rock the boat. Overall, however, he said, “We see AI as a friend and not a foe.”

Industry acquirer Bluespring Wealth Partners recently launched Blueprint for Growth, a targeted program that employs AI to help its partner firms streamline lead generation to increase revenue and drive business-to-consumer growth.

“Taking an AI-centric approach, we are fulfilling our commitment to offer scale and operational efficiencies to our partner firms,” said Angela Osborne, COO at Bluespring Wealth Partners. “Essentially, we’re offering a ‘time machine’ that allows our advisors to focus their precious time more efficiently on those ideal target leads most likely to become a client.”

Osborne says the AI is informed by the firm’s marketing messages, then prioritizes leads in the funnel and, combined with sales coaching, elevates the ability to close.

When it comes to picking stocks, Reddel said Gen AI could certainly help in that endeavor, but that’s not really the technology’s optimal use since much of those mechanics are already digitally automated.

“What Gen AI really does is organize a massive catalog of information that’s embedded in myriad places within these firms and make it accessible in a much more curated way to advisors, clients or other individuals in the firm,” he said.

Andrew Kacz, advisor and owner of Elevated Wealth Advisory, says his firm has already started using AI-generated emails to tailor its prospecting approach.

“Our firm uses Catchlight to build profiles of the people in our book of leads, and Catchlight is then able to pull from the data in those profiles and generate email outreach that is specific to the financial concerns that the recipients may have,” said Kacz, adding that because it pulls from “real data” the results are accurate in a way he wouldn’t be able to get if he just typed a prompt into ChatGPT.

“For us, this isn’t about replacing human work. This is a tool that helps our team jump-start the first conversations that ultimately lead prospects to become new clients,” said Kacz.

As to what Gen AI doesn’t do, the three biggest things are efficacy, security and responsibility.

The language models available today and the ongoing performance are not 100% accurate, Reddel said. They are also not 100% relevant to the question that was made, so there’s a long way to go in ensuring efficacy. Moreover, these models need access to information which is often very confidential and sensitive so there is a need for security and privacy around it.

Finally, there needs to be a large degree of responsibility as to how the model arrived at its conclusion to eliminate embedded bias.

According to many advisors, Gen AI’s biggest impact right now is driving down the costs in a firm’s operating model and allowing advisors to serve a bigger book of business. That means speeding up tasks like client onboarding or execution. Long term, however, the overwhelming feeling is that will be more of an impact on the revenue side.

As to whether Wall Street’s proverbial Goliaths will use AI to stretch their technological advantages over its Davids, Reddel believes the exact opposite is happening right now.

“We see this as an opportunity for smaller players to leapfrog what the big players have been doing because there is so much readily available tech from the ecosystem,” he said.