august2022 - 5

FEATURE
Is Artificial Intelligence Becoming a
Tool for Financial Advisors?
By Jason Bramwell
FINANCIAL ADVISORS ARE starting to be big fans of artificial intelligence (AI)-not
only because it can automate administrative tasks like data entry but also because
it is starting to have a significant impact on the client-advisor relationship.
" Against increasingly challenging market
conditions, AI has the potential to help wealth
managers sustain and drive new growth, create
operating efficiencies, and transform the
customer experience through more hyperpersonalized
insights and products, " said
Scott Reddel, who leads the North American
wealth management practice at consulting firm
Accenture. " Now isn't the time to take your foot
off the pedal. Firms can overcome adoption
speedbumps with continued commitment
from management, focused applications that
deliver business value, and-perhaps most
critically-collaboration across business lines. "
Accenture recently released new research,
" AI in Wealth Management: A Financial Advisor
Study, " after surveying 500 licensed financial
advisors in the United States and Canada
earlier this year who work at major wealth
managers, banks, insurers, and independent
wealth firms.
It revealed that 98 percent of respondents
believe that AI is transforming how advice is
created for, delivered to, and consumed by
clients, and 97 percent believe that AI can help
grow their book of business organically by more
than 20 percent.
In addition, 83 percent of advisors believe
AI will have a direct, measurable, and consistent
impact on the client-advisor relationship
by early 2024, and that same percentage believe
that within the next 18 months, " AI can achieve
a level of sophisticated advice and planning
that will ultimately leave financial advisors
competing with an algorithm for clients, "
the study said.
" Ensuring that financial advisors are
onboard with using AI-driven insights is a
critical ingredient for wealth managers as
they explore using AI to transform the client
experience, " Keri Smith, who leads Accenture's
Applied Intelligence practice for the U.S. Northeast,
said recently in a post on LinkedIn.
Other key findings of the study include:
* 87 percent of financial advisors would use more
AI tools day-to-day and are willing to spend time
to learn an AI-based process and tool if there is
a clear benefit to them.
* More than eight out of 10 advisors believe
AI-powered notifications of client life events
in real-time would be one of its clearest and
measurable benefits; prefer to use AI tools to
automate time-consuming and manual tasks;
and say AI's greatest benefit is translating
cl ients' data into act ionable insight for
their benefit.
* One in five advisors believe AI can help to segment
clients to further understand acquisition,
growth, and retention goals. They also believe
AI can help identify proactive cross-selling
opportunities.
But there are some wealth management
firms that have not fully jumped on the
AI bandwagon.
" Financial advisors are reliant on their
firms for technology that allows them to best
serve their clients wherever they may physically
be and whatever market conditions are
like that day, " said Michael Alexander, president
of wealth management at global fintech
company Broadridge Financial Solutions. " In
the fallout from the pandemic, wealth firms
are going to face increased pressures to invest
in modernizing their advisor technology or risk
losing their advisors to firms that already have
next-generation wealth platforms.
A June 2020 survey of 254 financial advisors
and planners from the U.S. and Canada found
that 51 percent of respondents often think of
leaving their current firm for one with better
technology tools, according to Broadridge. In
addition, 74 percent of financial advisors wish
their firm had access to better technology tools,
and 82 percent admit that paperwork detracts
them from time spent working with clients.
But even those firms that have taken some
steps to act on their AI strategies-from proof
of concepts to deploying AI within targeted
business units to even scaling it across the
entire organization-have encountered challenges,
according to the Accenture study.
" For example, half (50 percent) said that
their wealth management firms are challenged
to act on their AI vision, 55 percent
said that their firms' AI tools and insights are
too complicated to use, and more than six in
10 (64 percent) said their firm is taking on too
many AI pilots at once in its push to adopt
the technology, " Accenture said. " Aim for an
approach driven by a clearly defined business
strategy, not by the technology. Too many pilots
or work-in-progress initiatives could cause
financial advisors confusion and frustration.
Undertake a single-use case or program to
demonstrate the value that could be built to
a point of providing real value to the advisor. "
The pace of an AI roll-out should be done
in lockstep with a firm's business goals and
with buy-in from their financial advisors, the
consulting firm added.
" We recommend multidisciplinary teams to
be created and assigned to coordinating the rollout
for their particular work area to seek best
results, " Accenture said in the study. " Wealth
management firms need a 'smart deployment'
model so there is alignment between the firm's
pace of innovation using AI in relation to the
rate of adoption, use, and value they aim to
realize across their business operations. ■
Jason Bramwell is senior staff writer for CPA Practice
Advisor. He has nearly 25 years of professional
writing experience, the last nine
covering the accounting profession. He most
recently was a staff writer and editor at
Going Concern, and he previously spent five
years as a staff writer and editor at AccountingWEB.
He can be reached by email at
jbramwell@cpapracticeadvisor.com.
AUGUST 2022 ■ www.CPAPracticeAdvisor.com
5
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