We’re AI optimists when it comes to financial advice — here’s why


“The future is already here.”

That quote from essayist and sci-fi novelist William Gibson rings true regarding artificial intelligence in the financial advice industry. Many manifestations of AI are already empowering advisors and ushering in a profound, transformative impact on client engagement and the digital experience. 

Andrew Altfest of FP Alpha

Andrew Altfest, CEO and founder of FP Alpha

Yet the financial advice industry is at a crossroads, as advisors grapple with how to harness the power of artificial intelligence while preserving the essential human touch that clients value. While AI has the capacity to assist advisors with tasks like risk assessment and portfolio management, it has its drawbacks, occasionally leading to suboptimal recommendations

Philipp Hecker

Philipp Hecker, CEO of Bento Engine

At the same time, partly due to the changing demands of younger investors, the landscape of financial advice is shifting from a performance-based model to one emphasizing support and guidance. This transformation is evident in the latest iteration of the Kitces Financial AdvisorTech Solutions Map, which highlights the robust and substantial growth in the advice engagement category, one reflective of the wealth management industry’s commitment to elevating the overall advisor-client experience. 

Nathan Stevenson, founder and CEO of ForwardLane
Nathan Stevenson, founder and CEO of ForwardLane


As AI technologies continue to evolve, one thing is abundantly clear: Artificial intelligence has the potential to transform the financial advice landscape by personalizing and enhancing the client experience and by giving human advisors the leverage they need to serve more clients better. Let’s delve into current applications of AI for financial advisors, explore any existing gaps that remain and look ahead to what the future may hold.

Elevating engagement 
There are several critical areas in which AI is already effectively supporting financial advisors, including automation of back-office functions, enhancements in the efficiency of data analysis — for example around trust and estate documents — and advancements in client communication strategies. 

These AI-driven functions have been notably effective in affording advisors more time to focus on connecting with and serving clients. A recent J.D. Power study highlights the challenge advisors face in managing their time effectively: More than a quarter, or 28%, of surveyed advisors expressed concerns about having insufficient time available for client interactions. Among these advisors, 41% said they devote a greater portion of their monthly schedules to non-value-added tasks such as navigating compliance requirements or handling administrative responsibilities. 

In light of this, AI’s potential becomes even more crucial, especially on the data front. AI’s role in deciphering and leveraging large amounts of data is invaluable. Its ability to generate insights via simple algorithms in anticipation of upcoming age milestones, for example, can trigger distinct wealth management risks or opportunities and yield insights that allow the advisor to offer more comprehensive and holistic counsel while enhancing the quality of data at the advisors’ disposal. This aids in forging deeper connections with clients and developing a more profound understanding of their unique financial situation in a scalable and efficient manner. 

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AI can also enrich and elevate the client-advisor relationship by improving interactivity between portfolio data and the customer relationship management systems housing critical client information. This may foster greater transparency, granting clients a fuller understanding of their financial picture. Concurrently, AI acts as a vigilant sentinel, identifying and accentuating pivotal “moments that matter,” to the advisor, for example recommending educational tools and activities so they can engage in meaningful financial conversations with a client’s child. 

A proactive approach can facilitate systematic and timely delivery of valuable advice. 

Plugging the gaps 
When it comes to AI and compliance automation, there is ample room for improvement, particularly in the realm of real-time monitoring of critical data. Complete reliance on AI to manage a compliance program, therefore, remains fraught with substantial risks. 

There is also a prevailing reluctance among human advisors to fully trust and embrace AI. This underscores the need for proactive measures, such as the establishment of a trade group dedicated to addressing apprehensions surrounding AI applications. This group could initiate a comprehensive education program aimed at enlightening all stakeholders about both the advantages and drawbacks of AI solutions, fostering a more informed and confident approach to their ultimate adoption. AI’s continued enhancement of information, data and unique insights will continue to create efficiencies for advisors, who were previously burdened with manual data entry.  

Concerns do exist regarding the integration of AI, reminiscent of initial concerns about past technological advances such as ATMs triggering massive job eliminations at bank branches, or the advent of online shopping spelling the death of brick-and-mortar stores. However, these anxieties often prove to be unfounded, as technology tends to complement rather than replace humans. 

In the financial advisory industry, the essence of advisor-client relationships, anchored in empathy and personalized interactions, is not threatened by AI. Rather, AI offers a chance to reinforce these values and allows advisors more freedom to innovate in their interactions with clients, using AI as a tool to introduce tangible benefits. 

The move toward more accessible financial planning is being facilitated by AI, enabling more widespread service provision and aiming to uplift the overall financial health of communities. It’s about forging a future where technological advancements and human insights coexist and collaborate, creating an environment where financial stability and well-being are attainable and sustainable for more individuals.


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