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What Role Could AI Play in Investor Relationships?

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Can artificial intelligence foster stronger advisor-investor relationships?

A report from Salesforce explores how Americans choose and communicate with financial advisors. The 2017 Connected Investor Report is based on a survey conducted online by Harris Poll on behalf of Salesforce in June 2017 among 2,192 U.S. adults, ages 18 and older, of whom 635 currently work with a financial advisor.

“With the growing popularity of investors using both technology and human advice to achieve their financial goals, advisors are under more pressure than ever before to exceed the expectations of today’s digitally savvy clients,” according to Salesforce.

Americans who use human financial advisors primarily communicate with their advisors quarterly (40%), or annually or less often (27%), with only 10% of those surveyed communicating on a weekly basis.

Despite the rise of digital technologies, such as mobile apps, social media and more, communication between investors and advisors is primarily done today via traditional channels such as talking on the phone (73%) or meeting in-person (61%).

Only 10% of the respondents that have a financial advisor use social media to communicate with their advisor. Although this differs widely between millennials and baby boomers. While no boomers admitted to using social media to talk with an advisor, 28% of millennials use social media as a way to communicate with their advisor.

Many investors do use some tech-friendly ways to communicate with their advisor, such as email (61%) or texting (25%).

The survey also asked all the respondents if they would like to be able to make changes to their money, savings and/or investments via an app on a mobile device, and 17% said they already had the ability to do this. Another 39% admitted they would like to be able to do this, while 44% said they would not want this.

However, artificial intelligence (AI) shows promise in how it can potentially create stronger relationships between advisors and investors – particularly among millennials.

The survey finds that millennials – which the report notes is a small base size – are significantly more likely to be interested in AI capabilities offered by their financial advisors such as receiving personalized emails or texts related to financial goals (55%) or predictions on portfolio performance based on past trends (51%), than their baby boomer counterparts (36% and 22%, respectively).

In fact, millennials (23%) were also nearly eight times as likely as baby boomers (3%) to say they would be open to replacing their human financial advisors with a robo-advisor with AI capabilities.

Interestingly, though, the survey found that very few investors are currently using a robo-advisor.

“Despite the growing popularity of investors turning to technology to help with financial management, only 3% of those surveyed use a robo-advisor,” the report states.

Americans who currently use a human financial advisor cited strong trust in their advisors’ judgment (69%), accessibility to them (68%) and the fact they have a clear understanding of their and their families’ goals (59%) as top reasons why they feel their advisor is a good fit for them.

And, about half of all those surveyed across generations said they would like to collaborate more with their advisors.

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