Artificial intelligence (AI) has become a buzzword across industries, and it seems that the financial advisory industry is no exception. Many financial advisors have expressed interest in using AI to enhance their practices and better serve their clients. However, there are also concerns and doubts about the implications of this advanced technology in the industry.
According to a recent survey by SmartAsset’s SmartAdvisor matching platform, approximately 60% of 100 financial advisors who participated in the study stated that they are using or interested in using generative AI, such as ChatGPT, in their advisory practices. But what exactly is ChatGPT, and why are advisors showing interest in it?
ChatGPT is an AI chatbot that can interact with clients and prospects while analyzing data and drafting memos. For advisors who are already using ChatGPT, they reported that they use it for tasks such as writing educational content, following up on leads, routine communications, and scheduling. It is expected that in the future, AI will significantly streamline certain marketing, outreach and data-crunching tasks, potentially providing tailored portfolios and financial plans to investors.
Despite the potential benefits, there are also some concerns among financial advisors regarding the use of AI. The survey shows that 43% of respondents are not using AI such as ChatGPT and do not plan to. 38% of those not using AI stated that they are not comfortable with the technology, with another 26% citing that AI isn’t permitted by compliance or management. 23% responded that they have privacy concerns with AI or ChatGPT.
Advisors who intend to use AI as part of their advisory business will need to be well-versed in understanding the technological and compliance-specific limits of this technology. By doing so, they can provide better services to their clients, improve customer experience, and reduce overhead costs.
In conclusion, while the use of AI in the financial advisory industry shows potential benefits, it is still met with some caution by advisors. Financial advisors must weigh the benefits against the concerns and remain disciplined in their understanding of the technology’s compliance-specific limits.
