AI will be a mixed blessing, say advisers

A study of 267 UK financial advisers by research firm CoreData found that 32% believe AI will “revolutionise” the advice sector.

This increases to four in 10 (40%) advisers focused on high net worth (HNW) clients.

Among the key findings:

• 45% say artificial intelligence (AI) will help advisers serve clients more efficiently
• 31% say advice firms not embracing AI will be competitively disadvantaged
• 31% think AI will reduce advice fees, while 10% say it will reduce financial mis-selling
• 26% say their firm is looking to harness the powers of AI
• 19% think AI will replace much of the work done by human advisers

CoreData says the study highlights a number of benefits that advisers think will be created by AI technology. A quarter (26%) say their firm is looking to harness the powers of AI and three in 10 (31%) say advice firms not embracing AI will be competitively disadvantaged.

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The survey found that advisers serving wealthier clients were the strongest advocates of AI and see greater benefits from the technology.

HNW advisers say it will help serve clients more efficiently (59%) and a greater proportion think advice firms not embracing AI will be competitively disadvantaged (47%). In addition, far more HNW advisers say their firm is looking to harness AI (43%).

Overall four in 10 (39%) respondents agreed that their firm needed to spend far more on advice tech to stay relevant. A fifth (20%) say the FCA’s Consumer Duty will see greater advances in adviser technology than the Covid-19 pandemic. This rises to 25% of HNW advisers.

However the study, carried out in August, also revealed that advisers were concerned about the potential dangers posed by AI. More than two in five (42%) think it raises serious risks for advice firms in terms of client confidentiality and data protection. And over a third (35%) do not trust the information produced from AI.

Some respondents see AI as a threat to their jobs, with a fifth (19%) saying it will replace much of the work done by human advisers. This increases to 26% of mass market advisers.

Rory Wilson, managing director, UK and US, at CoreData, said: “While advisers harbour concerns about AI, they also recognise its potential to positively transform the industry.

“AI offers many opportunities for advice firms including automating tasks, managing data, assessing risk and complying with regulations. All of which could allow advisers to spend more time with clients and put into use those essential soft skills, including empathy and reassurance, which cannot be replicated by technology.”

• CoreData Research surveyed 267 UK financial advisers via an online survey in August

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