ComparisonAdviser's latest article examines how the implementation of AI in financial advisor firms is affecting both professionals and clients, as well as what it means for the future of the industry.
REDMOND, WA / ACCESSWIRE / July 16, 2024 / In recent years, artificial intelligence (AI) has seen a rapid ascent to prominence in society. This has resulted in many industries adopting the technology to help streamline business processes and serve consumers, including over 50% of financial advisors that have either implemented or plan to include such tools in their firms. ComparisonAdviser's recent article investigates how the spread of AI technology is directly impacting the financial advisor industry, including what it means for both professionals and clients.
Click here to access the article: https://comparisonadviser.com/news-and-studies/ai-in-financial-advisor-industry
According to the article, professionals currently use AI tools, such as ChatGPT and machine learning, to analyze, interpret, and compile data. Advisors then use this data to help make quantitative decisions and draft financial plans for their clients. This application of AI helps eliminate tedious tasks for professionals within advisory firms, allowing them to spend more time serving the client rather than crunching numbers.
The article also highlights robo-advisors as a clear example of how AI has existed in the industry for over a decade. According to Sean Canonica, the author, "Robo-advisor services are an instance where we can see how legislation holds automation accountable through the fiduciary standard." In the piece, Canonica interviews Andrew Bellak, a partner and wealth advisor at Perigon Wealth, about AI's ability to act in a client's best interest as an assistant within advisory firms. Bellak explains that it isn't "that easy" for a computer to know if a recommendation is entirely in a client's best interest. This limitation, Canonica says, "raises questions that clients should be aware of."
What AI means for the future of financial advice is also a legitimate concern. Thomas J. Brock, CFA, CPA, an experienced financial advisor and expert contributor at Annuity.org, shares with Canonica that the capabilities of robo-advisors are likely to "significantly increase in the coming years." As a result, this may allow for additional services, such as comprehensive financial planning, to be more readily available through an automated solution.
Bellak shares with Canonica in the article that the spread of AI draws similarities with "how the social media genie was unleashed from the bottle," leaving society to "legislate it under control." With the questions and concerns that AI brings, Canonica indicates that it will be up to both advisory firms and regulatory bodies, such as the SEC and FINRA, to guide the industry forward by ensuring the technology is used effectively and ethically.
Contact Information
Sean Canonica
Senior Finance Writer
scanonica@comparisonadviser.com
SOURCE: ComparisonAdviser
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