In his end of year reflections for 2024, Sam Altman, the CEO of ChatGPT said: “We believe that, in 2025, we may see the first AI agents join the workforce”.
The launch of China’s DeepSeek could accelerate the adoption of AI, making it cheaper and more accessible. However, while many advisers recognise that using AI could enhance productivity, use remains piecemeal. Will it accelerate?
Recent surveys suggest the financial advice industry is open to the use of AI, but lacks the tools to incorporate into day-to-day activities. In the recent Schroder UK Financial Adviser Survey, 75% of advisers reported seeing the development of AI as primarily an opportunity rather than a threat. This represents progress from just a few years ago, when the main concern of financial advisers was that they would be taken over by a robot.
Schroders said: “Many think AI has the potential to power solutions that will help them to deliver enhanced services to clients and deliver efficiencies within their business. It is incredible to see that 21% of advisers have already implemented some form of AI technology and a further 69% anticipate incorporating AI based technology applications in their advice process in some way in the future. We are already hearing of examples of where AI is being used to help with suitability reports, KYC processes and client correspondence.”
Another survey by Opinium tells a similar story. It showed that around two in five IFAs either use or are planning to use AI in the next 12 months, with a majority seeing AI as potentially helpful for managing low value clients as well as creating efficiencies in working practices.
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However, it also highlighted some of the problems, with only a quarter of advisers saying they plan to train staff on how to use AI. Intelliflo research showed that advisers recognise the value of integrating AI into the advice journey, but also that 95% feel they don’t have the required skills within their business to do it effectively.
Terry Huddart, technical director at the Lang Cat, said relatively few advisers have embedded AI in their technology stack, but he has seen anecdotal evidence that advisers are using widely available AI tools, such as ChatGPT to do research. “For example, we can see that they use AI to look at how our MPS Analyser tool compares to similar products.”
Using these tools is certainly part of the story. They can deliver greater personalisation in marketing materials and help with researching providers.
Charlotte Wood, head of innovation, fintech and AI strategy at Schroders, pointed out that using these tools can deliver a first draft for client communications in a matter of minutes, and from there, the user simply has to check, add any personalisation and send. They can also be used for meeting preparation – asking AI what type of questions they should be asking based on a range of criteria.
These tools will become more sophisticated and, by extension, more helpful. Wood said: “They won’t just be about returning information but will enable users to do things. For example, there may be an action out of a meeting, such as scheduling a follow up meeting – and AI could do that on someone’s behalf.
“It may not only research travel options but book a flight – with a prompt. It may also be able to look at customers coming to a website, do an evaluation of those demographics, and then even drafting content and sending content based on what they’ve been looking at.”
However, said Huddart, the era when advisers start using specific financial adviser-focused AI software is still a little way off. He said there are a range of tools emerging that could make significant differences to adviser businesses.
“We have been working with a group called Avenir,” he said. “Its product allows advisers to upload PDFs to do client reviews and product reports. The adviser signs up, uploads its product research and the system uses AI to produce those reports. There are a clutch of new market entrants in the software sector that are at the beginning of making things happen.”
He believes there could be a snowball effect over this year and next as new providers come to market, and advisers recognise the efficiency gains they can generate. However, he also believes this will depend on providers being willing to come together, share data and collaborate.
“Companies will need to be open to working together so AI can work properly,” said Huddart. He added that a lack of collaboration has stymied previous technological progress.
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The productivity gains could be significant. Intelliflo found that advisers spend an average of 5.3 hours on average writing reports as part of the new client onboarding process. This is the depressing equivalent of 70 days a year. It would represent a game-changing business improvement if this could be reduced.
There are other potential uses for AI. For example, in the Opinium report, more than half of advisers said they thought AI could be useful for managing lower-value clients.
There remains a significant gap between those who can afford financial advice and those who need it, and it is plausible that AI can bridge that gap. Intelliflo suggested that using AI voice generators could be an effective way of making financial information more accessible and may even help with vulnerable clients. AI may also be useful for business forecasting and therefore making informed decisions on planning and hiring.
The brave new world of AI-enabled advice is still some way off, but, as Sam Altman suggested, it may accelerate over the next two years as advisers recognise the potential efficiency gains.
For the time being, adviser use of AI is confined largely to external, non-specific tools, such as ChatGPT, but new products are coming to market that advisers can build into their technology stack. This may be where the real game-changing productivity improvements emerge.
