FROM THE BLOG

The business of “dispensing financial advice” is always evolving, making it so fascinating to me. Currently, one of the driving forces behind today’s evolution is Artificial Intelligence (AI). While many associate AI with things like self-driving cars or Google search results, it’s also making a big impact in the financial services industry, especially for financial advisors.

Many of the daily tasks a financial advisor tries to complete or delegate to teammates are being re-analyzed through the lens of AI. Can AI make financial advisors more efficient, freeing up time for deeper client relationships, and ultimately making the client service process smoother and more tailored to each client’s unique needs? The answer gets closer every day.

Being a financial advisor has always been about understanding a client’s goals, assessing risks, building a plan to meet or exceed those goals, and communicating the value of your services in a way that each client can internalize. But what if AI could handle some of the repetitive, time-consuming tasks that usually take up most of an advisor’s day? This could be the dream scenario for an advisor trying to be more efficient with their service model and maybe create some capacity to take on new clients.

Can AI-driven tools help a financial advisor:

• Analyze and summarize vast amounts of market data?
• Automate portfolio rebalancing tasks?
• Assist in the creation of more personalized investment recommendations?
• Identify behavioral patterns of a client to better predict how they will handle market swings?
• Service clients by providing timely answers to their basic investing concepts using website chat-bots?

As we move forward in our evolution, machine learning algorithms within AI will answer these questions more and more in the affirmative. This will benefit advisors looking for deeper insight into their business, their clients, and the markets, enhancing client experiences and deepening each financial advisor’s value proposition.

As with any evolutionary trend in any sector of our economy, change comes with certain risks. These risks will need to be managed and mitigated using policies designed to change as new information becomes a reality. Industry regulators are going to try to get ahead of the changes and think about how the client could be affected. History has shown us that this is a constant game of “catch-up” and doesn’t always come across coherently. Buckle up—the ride will continue to be bumpy!

It remains a great day to be a client’s trusted advisor…

Ken Manning
Director of Platform Solutions

Posted by Prospera Financial