Artificial intelligence will have a “major impact” on the way advice firms transact business and interact with their clients, says NextWealth, after nine out of 10 firms said they anticipate increased speed and operational efficiency from AI.
Two thirds (65%) of advice firms said they expect AI to result in a reduction in operational costs while just under three in five (58%) expect improved client experience and personalisation of services.
Heather Hopkins, managing director of NextWealth, said: “We are tracking the use of AI as part of our AI Lab because we see it as a game changer. It will improve client experience, reduce cost to serve and increase access. But AI also has the potential to make the job more fun for advisers and their teams. There will be less of the menial slog, less risk of human error, freeing up headspace to do more thoughtful human work for high-value clients.”
NextWealth said 33% of firms that it surveyed are currently using AI for the automation of routine tasks, with a further 63% considering AI for this purpose. Just under a fifth (17%) are already using it as a personal assistant, while 46% are considering doing so. A further 10% said they already use it for client interaction and the same number use it to personalise communications or portfolio reporting.
Hopkins said: “While advice firms are waking up to the benefits AI can provide, there are some major hurdles that need to be crossed along the way. The main one is the age-old problem of data and systems integrations. This is a well-documented bug bear of advice professionals and it needs to be addressed to unlock the potential of AI.”
Two fifths (40%) of advice firms cited the ability to integrate with other systems as the biggest barrier to adopting AI in business over the next 3-5 years. A third (33%) said data availability and connectivity while a quarter listed relevant AI-powered solutions as the greatest hurdle. Just shy of a fifth (19%) listed regulation and compliance as a leading barrier.
NextWealth said there are plenty of opportunities for all types of providers offering AI solutions.
Hopkins added: “AI will be implemented across businesses in various functions. That said, when it comes to delivery of regulated advice, we think specialist solutions will dominate while vertical specialism is less relevant for solutions supporting data requirements and back-office efficiency.”
