AI use in the financial advisory industry may be booming but clients are still expressing a degree of unease about the technology, according to a new study from Cerulli Associates.
Cerulli’s research found that just 38 percent of affluent investors are at least somewhat comfortable with AI, a similar figure to the 39 percent who said the same in 2024. Younger investors are the most supportive of AI in their financial relationships, the study found, with more than 60 percent of those under the age of 50 comfortable. However, that support drops sharply among those in their 50s, to 42 percent, and slides to just 16 percent among those age 70 and older.
“If AI is to play a role in their business operations, advisors would do well to disclose where it is used, how clients’ sensitive information will be protected, and how it enhances, rather than detracts from, the advisor-client relationship,” said John McKenna, senior analyst at Cerulli, in a statement.
The latest Cerulli Edge - U.S. Retail Investor Edition report also found that 34 percent of investors with assets between $1 million and $2 million are comfortable with AI tools being part of their financial advisor relationship. The same number of investors with assets between $2 million and $5 million also said they are comfortable with AI. However, this number jumped to 44 percent of investors with assets above $5 million.
AI is rarely out of the news at the moment. Earlier this month, for example, RIA custodian Altruist added tax planning to its Hazel platform, a move which hit shares of Raymond James Financial, Inc. (Ticker: RJF) and Charles Schwab (SCHW) as the technology continued its relentless push into the financial advice industry.
However, even technology providers see a future with face-to-face human interaction.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.
Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
