Some financial advisers are ignoring the potential benefits of artificial intelligence (AI) to get the job done better, while others are implementing AI in a bid to gain a competitive edge.
Arch Capital managing director Nigel Baker sees the reality of high demand from consumers retiring and needing advice while the industry struggles with capacity constraints.
“It’s hard to find talent, and older client books have a lot of low value clients, where the cost to serve exceeds the fee in the current business model,” Baker tells Professional Planner. “No longer can high fee clients subsidise others.”
To solve this issue, Arch Capital has looked at AI to create a better connectivity between advice and technology so it can focus on complex clients and provide a valuable service.
“We’re using a digital platform that will incorporate AI to help us serve more people more efficiently, and at the end of the day as advisers, we want to help more people and run great efficient businesses,” Baker says.
“The advice business of the future will need technology to connect with clients.”
Brighter Super has also implemented AI to support the adviser and member experience. Head of advice, Steven O’Donoghue, says the technology has enabled the team to strengthen its adviser and member services by incorporating AI within call centre operations, with further applications being explored.
“We recognise that AI aids our team, but also doesn’t replace the invaluable human interactions and personalised support our members value,” O’Donoghue says. “We remain an advice-led fund focused on personal connection.”
AI adoption has primarily been through the introduction of the recently released Microsoft Copilot product, according to Andrew Saikal-Skea, founder of Saikal-Skea Independent Financial Advice.
The firm uses AI to shorten the time it takes to create its Statement of Advice document and using Copilot to create a client-friendly PowerPoint presentations to use in its advice presentation meetings.
“This is something that we’ve wanted to do for clients for some time, but the practicality of producing the additional PowerPoint document was time consuming and prohibitive. In this way, AI has been able to directly improve client outcomes by improving our service offering,” Saikal-Skea says.
However, he admits that integrating AI is in its infancy and the results aren’t perfect. For example, you need a good understanding of what Copilot can do and work within that framework.
“It’s definitely important to manage your own expectations as well as the team to avoid frustration with the AI not quite hitting the mark,” he says.
He also uses AI to research through documents. “We can search through our client files to easily identify where we have previously discussed or provided advice on specialist areas,” Saikal-Skea says.
“This gives everyone in the team an effective knowledge database to draw upon, without asking around or trying to remember where we’ve provided similar advice before.”
But advisers know the technology has plenty of room for growth.
Apt Wealth director Andrew Dunbar admits he’s acutely aware of the risks AI. “We’re convinced on the operational efficiencies AI will deliver to the provision of financial advice, but believe the personal relationship with a human will remain a prerequisite for most Australians,” he says.
“We’re hopeful this will lead to reduced cost of advice and therefore access for more Australians, as we know the benefit of advice is profound.”
However, Dunbar admits he’s extremely wary, believing that scams will be increasingly common as firms roll out AI. As a result, he is strengthening cyber protections.
“Protection of our clients’ data is a business critical priority and we see Australia’s adoption of AI tools and software as a risk to their data,” Dunbar says.
“We are also concerned about Australians relying on AI to help them manage their finances – AI hallucination is commonplace and may convince someone to make a poor decision with devastating consequences.
“AI also still struggles to understand a person’s values, emotional state and conflicting objectives, which at this stage advisers are very experienced and skilled in dealing with, but we are intrigued to see what the future holds.”
Small independent Newcastle firm Braeside Wealth is also exploring AI in the hope of landing on some efficiency, with founder Lance Swansbra admitting that AI has the ability to automate mundane tasks and streamline processes.
“We’re starting to use AI to help build client presentations for prospective clients and assist with social media content,” Swansbra says.
However, he’s acutely aware of the risk of errors creeping in.
“We used AI to help write a short article about non-concessional superannuation contribution caps and it brought in the old cap figure,” Swansbra says.
“If this hadn’t been checked by a human, it could have gone out to clients and provide incorrect information, which wouldn’t have been a great outcome.”
