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How Advisors Can Use Artificial Intelligence

May 23, 2018

Financial advisors need to harness the benefits of artificial intelligence to make their work more efficient and cut costs — or risk falling behind, Roger Wohlner writes on Investopedia.

According to many, the next frontier of AI in the advice space is how the technology can help advisors manage client relationships, says Wohlner, a financial advisor based in Arlington Heights, Ill. Advisors could employ AI during meetings to model investment recommendations performance and access client information, and there is a plethora of existing financial planning software that already does just that, he writes.

But AI’s learning capacity will further boost its analytical and predictive chops, leading to a reduction in the amount of time and resources advisors spend on routine account monitoring, portfolio allocation, and administrative work, according to Wohlner.

AI can also help advisors answer clients’ questions prior to meetings as well as keep tabs on a client’s overall financial picture and suggest actions such as refinancing or investment allocation improvements that become possible with changes in tax law, for example, he writes.

Failure to keep up with advances in AI, meanwhile, could cause advisors to lose out, particularly with tech-savvy millennials and Generation X clients, according to Wohlner.

AI can also help advisors scale — and scale they must, according to Investopedia.

"Today the average advisor is supporting 200 to 300 accounts or households. In order to be successful two to three years from now, you’re going to need to support 1,000,” Joseph Chalom, head of product at BlackRock Digital Wealth Solution, said at an Envestnet Advisor Summit last week, according to Investopedia.

Large firms such as UBS are already launching virtual advice platforms capable of answering some client questions that cut out the need for help from client associates or update calls, the website writes.

Such platforms let advisors have answers to questions at their fingertips, according to Investopedia. Meanwhile, through automating tasks, advisors can spend more time with a growing number of clients, the website writes.

By Alex Padalka
  • To read the Investopedia article cited in this story, click here.
  • To read the Investopedia article cited in this story, click here.