For financial advisers, the arrival of widely available, easy-to-access generative artificial intelligence has been a mixed blessing.
There is an (often unvoiced) fear that these tools might threaten how clients value their services, and eventually become another driver of lower fees.
And yet, as ChatGPT and its fellow large language models become less novel, it is clear some applications can enhance the client experience. AI can be used to solve business challenges at pace and allow non-technical advisers to handle increasingly technical tasks.
I understand balance acutely. We work hand-in-hand with some of the world’s largest financial organisations, many of whom have large numbers of financial advisers. These people are trying to translate the excitement of the executive suite — who are seeing Gen AI as a transformation — into actual product innovation.
I find the best approach to finding where to use AI is to look for pain points inside an organisation. What tedious, repetitive tasks keep advisers away from client conversations and developing better investment plans for clients?
Administrative tasks are an obvious place to start. A short list of things that probably will not make an adviser’s favourite task lists: the creation of suitability letters; to analyse Zoom calls; and drafting of compliance reports.
It should be relatively simple to take templates and basic client information to create better drafts that can then be reviewed by advisers.
Here, Gen AI projects can intersect with and enhance earlier AI projects. Large financial organisations have spent the better part of a decade using AI tools to help with exception management and other back office functions. Now, Gen AI can help draft responses and other materials that may need to be prepared for regulators or compliance teams.
Companies such as Morgan Stanley, Morningstar, NatWest, Schroders Personal Wealth, JPMorgan and BlackRock have integrated Gen AI into their back-end services. That is obviously an incomplete list — it is hard to find a major financial company without a significant AI investment.
Sharper, more interesting communications
Advisers need to build and maintain strong relationships with clients. An advisory role is fundamentally (or at least partially) a communications role, but doing that at scale across a practice can be challenging.
Basic information about the equity markets might be noteworthy to the client who does not follow the market at all, but for others it could scan as downright desultory. Gen AI promises to increase the amount of material one person can create. Then, with more information, each client can receive something more tailored to them.
There is also the possibility that advisers can give a variety of choices to clients about what information would be of interest to them. Hopefully that information can then be combined with other demographic and financial information to provide a bespoke approach to relationship management.
