Advisor360°: Next-Gen Financial Advisors Say Generative AI Will Help – Not Harm – Their Careers and the Industry

New Survey Reveals Younger Advisors’ Upbeat Outlook on Artificial Intelligence in Wealth Management

Artificial intelligence (AI) may not be the threat that some in wealth management assume it to be – at least, not according to younger financial advisors. A new survey by Advisor360°, a leading provider of integrated technology for enterprise wealth management firms, reveals that 64% of younger advisors call generative AI “a help” to their practice, while 57% believe it is a benefit to the industry.

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Advisor360°’s 2024 Connected Wealth Report: AI & the Next-Gen Advisor looks at how the next generation of financial advisors perceives AI. The report’s findings stem from a survey of 300 financial advisors, aged 36.5 years old on average, managing an average of $40 million in client assets.

Next-Gen Advisors Are Generation AI

Only 21% of advisors surveyed consider generative AI to be a threat to their personal livelihood and 31% call it a threat to the industry.

“The up-and-coming generation of financial advisors sees generative AI tools as potentially effective for growing and managing their businesses,” said Darren Tedesco, President, Advisor360°. “Advisors are looking to AI to take on administrative and operational tasks so they can focus on higher value activities, like meeting with current and prospective clients.”

The survey indicates that a new reality is beginning to form around the way advisors work with their clients, as the adoption of generative AI tools has been fast and far-reaching. In fact, 83% of respondents already have access to tools with natural language generation (NLG) technology (e.g., ChatGPT), but only 44% say they currently use them for client communications.

A Call for Guidance on AI Usage

Having access to these tools and using them are two different things. Advisors’ top challenge with generative AI is that they are hamstrung by firm policies on the technologies they can use. Their frustration is evident: while nearly all respondents (97%) say their firms have AI strategies, 43% say advisors should be more involved in shaping them.

More than half (53%) of advisors say their firms do not have established policies on how to use generative AI, though firms seem to be working to address this. Already 27% of advisors surveyed say generative AI policies are in development at their firms.

Wealth management firms may be slow to develop policies in the absence of clear guidance from regulators. The advisors surveyed say a more concrete direction is needed, with 68% asking for specific regulatory guidance around AI. Only 32% of respondents believe existing rules will suffice in the future.

“The wealth management industry has only started to scratch the surface on what generative AI can do,” said Tedesco. “Firms with the right systems in place joined with comprehensive and clean data can expect to realize mammoth gains in efficiency, as generative AI is able to tackle more streamlined processes and automated tasks faster and with fewer errors.”

About the Survey

As part of its ongoing Connected Wealth Report research, Advisor360° surveyed 300 financial advisors and executives at large broker-dealers, registered investment advisors and bank trust companies across the U.S. for their perspective on the impact of artificial intelligence (AI) on their business and the industry. Survey participants were employed by enterprise wealth management firms with an average of $9 billion in assets under management and more than 1,000 employees. Respondents to the telephone to web-based survey were 36.5 years old on average with an average of $40 million in assets under management. The survey was fielded between September and October 2023 by Coleman Parkes Research on behalf of Advisor360°. Advisor360° and Coleman Parkes are separate and unaffiliated organizations.

About Advisor360°

Advisor360° builds, integrates, and delivers technology for wealth management firms. The company’s award-winning integrated and open architecture SaaS platform brings a connected digital wealth experience to financial advisors, their clients, and the home office so that firms can drive better outcomes and innovate quickly. Advisor360° clients benefit from timesaving capabilities and streamlined workflows when it comes to portfolio and performance reporting, financial planning, insurance, proposal generation, trading and model management, digital onboarding, document management, analytics, and compliance. The company’s proprietary Unified Data Fabric® (UDF) is the foundation of its platform, weaving together shared services and pre-built integrations that work with existing technology stacks. The company is headquartered in Weston, Massachusetts, with offices in Bengaluru, India; Belfast, Northern Ireland; and a remote workforce in Canada.

Today, three million households with $1 trillion in assets benefit from the connected Advisor360° experience. To learn more, visit www.advisor360.com.

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