Five ways financial advisors can use AI to improve efficiency

If 2023 was the year for big picture digital transformation and AI innovation globally, then 2024 has been the year where AI became part of everyday processes. For many, this journey began over the past 18 months by experimenting with free generative AI tools like ChatGPT or their tech provider’s equivalent like Microsoft’s Copilot. It has also led industries such as financial services to question where these AI-powered digital assistants can be best applied or what other AI services can help their business.

As the Financial Advice Association of Australia (FAAA) notes, “AI has the potential to add considerably to the productivity of financial advisory practices, freeing up planners from routine tasks to focus on the real business of creating wealth for investors. While the use of artificial intelligence in firms is in a nascent stage, many advice businesses recognise AI’s potential to evolve daily operations and bottom lines.” For financial advisors starting the AI journey, the easy wins have tended to be in improving efficiencies, saving time and decreasing costs in areas like content production and client support. Here we look at the five key areas where advisors are reporting benefits.

Organising workload

The average financial advisor might conduct eight to 10 client meetings per week. Factor in the time needed to prepare and file notes afterwards, and you are looking at a significant chunk of the working week. Advisors have reported that using AI to record, transcribe and summarise client meetings has been the most obvious time saving they have experienced so far. With no need to take notes, everyone in the room can be fully engaged in the conversation while the ability to produce an accurate summary within 15 minutes can lead to a significant saving in the admin time needed to service each client. Another example is advice firms using AI to index document uploading, feeding them into the right parts of our workflow to help process and administer client information.

Client service

Better documentation of client interactions also has a flow-on effect to the client experience, especially when AI can assist in reducing complex financial services jargon to a few actionable bullet points. Some early-adopter financial advisors believe that AI’s full potential may ultimately lie in producing personalised, data-driven financial guidance — assuming AI-generated financial advice one day complies with Australian laws and regulations. Client interactions can also be improved by using AI to optimise marketing efforts, improving overall efficiency and effectiveness while reducing costs. In this scenario, AI is more than just a technological tool, functioning more like an intelligent and proactive assistant in augmenting the capabilities of the financial advisors.

Email and website communication

Copilot and other AI can help users write better emails by providing suggestions on how to adjust their tone and clarity before hitting send. The technology can also summarise long email chains into a few key points or generate draft replies based on an individual’s recent emails and other relevant information. This may assist in adopting an appropriate tone with each client, which may be especially useful when having difficult conversations, and to convey their intended message more effectively. The advantages for those practices with a substantial but diverse client base are clear. There are now also established use cases where AI has been focused on assisting in the client discovery or fact-finding process or to respond to initial client inquiries online. AI-powered chatbots can handle routine inquiries, schedule appointments and provide basic general support responses.

Content creation

AI’s ability to automate mundane tasks is now well established and the new frontier is its capacity to craft engaging social media posts, generate comprehensive market reports or even tailored client communications. This may still require some human input but there is no doubt that AI-powered tools can streamline the content creation process for time-poor financial advisors. For now, this may be as simple as using AI to minimise mistakes, inaccuracies and errors in marketing communication images, video and text but AI can also provide in-house support in areas that most small businesses don’t have a dedicated resource for. Some examples include:

• The ability to draw information from multiple sources
• Helping to turn complicated market reports into client friendly versions with simplified language
• Filling comms skills gaps in the team and providing a starting point to review and refine content
• Increase frequency of content and client touch points across social platforms which can help educate clients, increase engagement and which, ultimately, may result in client leads.

Automated advice documents

While financial advisors must adhere to their licensee’s policy framework around data security and privacy standards, there will likely be scope for AI beyond administrative tasks. For now, advisors are largely being warned off doing client calculations and modelling or producing advice documentation through AI tools. However, some variety of enterprise-grade AI solution seems inevitable in the next few years and the impact on business models may be significant. For now, advisors may wish to continue down the path of individually experimenting with AI with the support of their licensees on this digital modernisation journey. The next 12 months is likely to see the conversation shift from “what if” to “what’s next” as more case studies and success stories emerge showcasing how AI, big data and client portal technologies have been integrated in advice practices.

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FURTHER READING

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• Top 4 challenges advisors face in the Great Wealth Transfer
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