Financial advisors today are using artificial intelligence to transform every aspect of the client experience, from the front end to the back office; attract future clients; and introduce new products and solutions.
A survey commissioned by Nationwide Advisory Solutions finds that 66% of registered investment advisors and fee-based advisors and 94% of early adopters who currently use artificial intelligence in their practice expect AI to give them and their firm a competitive advantage in the financial services industry.
This is happening even as AI continues to pop up in headlines as debate around online privacy grows more heated and the effect of trading personal data for convenience comes into question.
“Once the exclusive domain of large institutions with deep pockets, and more recently utilized by consumer giants such as Amazon and Apple to ensure ease-of-use and customer satisfaction, RIAs and fee-based advisors are now adopting AI to enhance the human connection with clients — and gain an edge over the competition,” Craig Hawley, head of Nationwide Advisory Solutions, said in a statement.
“Just as we are using AI and advanced analytics to put the advisor at the center of everything we do, our latest research shows that RIAs and fee-based advisors are leveraging AI to understand clients, predict their priorities and provide personalized holistic planning — proving that putting clients first is the best way to drive greater growth and profitability.”
A recent report said technology and the speed at which it promises to disrupt the financial services sector is the main thing that causes leaders of wealth and asset management firms to lose sleep at night.
The Harris Poll conducted the online survey within the U.S. in January and February among 972 financial advisors and 827 adult investors. The advisor sample comprised 508 RIAs and 464 broker-dealers. Among the investor sample, 208 respondents were mass affluent, 206 emerging high net worth, 208 high net worth and 205 ultra-high net worth.
Artificial Intelligence uses advances in machine learning, including refined algorithms, predictive analytics, natural language processing, speech recognition and image recognition to assess big data from disparate sources, evaluate complex problems and help advisors make more accurate decisions.
AI adoption is low so far. Only 33% of RIAs and fee-based advisors who were at least somewhat familiar with AI said they were currently using Artificial Intelligence. However, 51% of those at least somewhat familiar with AI said they planned to integrate or expand its use in their practice over next 12 months.
Early adopters presented a dramatically different profile. Eighty-eight percent said they had added AI into their practice in the past 12 months, and 84% planned to add more over the coming 12 months.