A CoreData study involving 267 UK financial advisers revealed mixed opinions about the role of artificial intelligence (AI) in the financial advice sector.
Approximately 32% of advisers believe AI will revolutionise the industry, with this sentiment rising to 40% among advisers focusing on high net worth (HNW) clients.
The study identified several perceived benefits of AI in financial advising. Around 45% of advisers see AI as a tool to enhance client service efficiency, and 31% believe it could lead to reduced advice fees.
Notably, 10% of advisers think AI could help reduce financial mis-selling. However, a significant portion of advisers, 31%, warn that firms not adopting AI might face competitive disadvantages.
Advisers catering to wealthier clients are more optimistic about AI, with 59% acknowledging its efficiency benefits and 47% viewing non-adoption as a competitive risk. Additionally, 43% of HNW advisers report that their firms actively seek to harness AI technology.
The survey also highlights a broader focus on technology in advising. 39% of respondents agree that significant investment in advice technology is necessary for relevance, especially with new regulations like the FCA’s Consumer Duty expected to drive technological advancements.
Despite these positive outlooks, there are concerns among advisers regarding AI.
Over 42% worry about potential risks related to client confidentiality and data protection, and 35% express distrust in AI-generated information.
Mass market advisers are particularly concerned about confidentiality and data protection issues. Moreover, the possibility of AI replacing human advisers is a concern for 19% of respondents, rising to 26% among mass-market advisers.
Rory Wilson, managing Director, UK and US, CoreData, said, “While advisers harbour concerns about AI, they also recognize 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.”
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