How much caution around artificial intelligence is too much? How do you use this technology responsibly?
RIAs have a reputation as early tech adopters in financial services. The right technology can help you punch above your weight class in the services you offer, your client experience and the tools you use to fuel organic growth without adding headcount. But embracing tech doesn’t have to mean recklessness. “Move fast and break things” is a great slogan if you’re a tech giant, but it isn’t exactly a comforting motto when you’re handling someone’s life savings.
Let’s be clear: AI is already changing how firms operate. An Accenture survey found that 83% of advisors expect AI to significantly affect their client relationships over the next 18 months. Nearly all believe that it can boost business growth by more than 20%. That’s a lot of promise and a fair amount of pressure.
Any big change comes with some degree of uncertainty. The real risk right now? Overdoing it.
While AI can help you scale, it can’t replace judgment, build trust or read the room. There is a real temptation to give into Silicon Valley hype and delegate your entire practice to a chatbot. Some advisors are starting to hear pushback from clients: “I pay you to understand me. Why did you outsource me to a machine?”
When clients see low-effort content, the message they receive is, “My advisor couldn’t even bother to connect with me as a person.”
AI can’t make bias-free decisions. It can’t operate without oversight.
What can the emerging technology offer for RIAs? Here are four strategies to get the most out of AI.
1. Use AI to prepare for client conversations.
Artificial intelligence can absolutely support the human work that you do for other humans. Many of us have already seen how much time AI saves in preparing for client conversations, building predictive insights about client behavior and intuiting next best steps or notifications to engage.
AI has emerged as a kind of helpful digital analyst, perpetually loaded on five-hour energy drinks and great at spotting data patterns.
2. Let AI surface insights and next steps — but don’t overdo it.
These time-savers are a great first step for RIAs just starting to dip their toes in the AI waters. You can score easy wins and earn back time to spend on human-to-human activity. At the same time, you don’t want these tools talking directly to clients without review. Unvetted responses can erode client trust and invite compliance risk.
After all, most AI models are not built with fiduciary standards in mind, and regulators are paying attention.
3. Don’t confuse automation with human interaction.
I don’t say this to scare anyone out of using AI to grow their businesses. I’m actually encouraging RIAs to do what they have always done: Embrace tools that will set them apart from competitors and make them indispensable to their clients.
But AI is not an easy-button answer to every task, any more than robo-advisors were a full replacement for human-driven advice.
We know how the story of robos ended: They became a commodified tool for client segmentation. AI won’t replace human advice, either, but it has already shown far more potential as a growth tool.
4. Vet vendors with a compliance and trust lens.
The trick is to use AI wisely. Look for vendors who can demonstrate clearly what their tools actually do. Ask how they support your compliance and data security needs. Ask yourself:
“Is this trying to replace my human judgment, or support it?”
“Can it explain what it’s doing and why?”
“How does it protect my clients and their data?”
AI is here to stay. But like any valuable tool, it works best when used with care. The firms that benefit the most will be the ones that keep their client relationships at the center of their strategy and stay grounded in what’s always mattered: trust, relationships and real insight.
Adrian Johnstone is CEO of Practifi, a software company specializing in a platform offering data unification and customization capabilities for the wealth management sector.
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