AI results in job cuts at firms. But are advisors getting better service?

On a corporate level, the advance of artificial intelligence and its ability to replace workers is widely celebrated.

What financial advice firm, from giant broker -dealer to 10-person registered investment advisor, doesn’t want to layoff back office workers with the result of boosting firm profits?

The story for employees, however, is far from sanguine. There’s no doubt that firms developing and using AI to replace jobs is linked to the loss of jobs.

Industry executives have been quick to praise the use of AI at their broker-dealers or RIAs; chatbots and the like are replacing the labor of back office workers who oversee the transfer of accounts from one firm to another when a firm recruits an advisor.

AI is also replacing the tedious task of filling out forms when clients buy specific products like annuities, still the bread and butter for many large broker-dealers.

But one industry recruiter wondered whether the firms using AI, at least for now, turned into better service for financial advisors.

“Advisors have an overall level of frustration with service in the financial advice industry right now,” said Jodie Papike, president of recruiting firm Cross-Search.

“That means, when an advisor calls his firm, the hold times they experience continue to get longer,” Papike said. “It means advisors are not confident that they’re getting the right answer to questions about paperwork for a client or processing a trade.”

And recent employment statistics only show the tenuous position of many back office workers at large and small financial advice firms.

According to a report last week from the U.S. Bureau of Labor Statistics, “financial activities employment” declined by 22,000 in May and is down by 107,000 since a recent peak in May 2025.

For the month, job losses occurred in insurance carriers and related activities, down 11,000, and commercial banking, down 3,000. 

UBS Group, Morgan Stanley, LPL Financial Holdings Inc. and others have recently cut jobs. 

“AI is clearly having an impact on the level of staff firms need to operate,” Papike said. “The other issue hurting jobs is consolidation. Layoffs are inevitable after mergers. When a firm can cut costs it will do so.”

“But advisors want hands on service, and AI cannot replace that,” she added.

While back office workers’ jobs are at risk, financial advisors are not going anywhere, at least not in the near future. They control the clients, the wealthiest of whom are over 60 years old and not about to switch to using a machine for financial advice.

Indeed, financial advisors could see a boost in the profession in the coming years as AI reshapes work.

While many in the industry run around with their hair on fire crying about an impending doomsday shortage of advisors, the Bureau of Labor Statistics last year projected 375,900 financial advisors to be employed by 2033.

That would be a 17.1% increase of the 2023 total of 321,000, among the highest increases for jobs to feel the impact of artificial intelligence.