Licensees should bear the responsibility of implementing artificial intelligence rather than advice businesses as they have better capabilities and more expertise.
Thirdview owner Peter Foley tells Professional Planner “licensees are doing a better job than they ever have” and this should also apply to AI implementation and education for their advice firms.
A way in which licensees can be trained in AI usage is by appointing a full time subject matter expert.
Foley says licensees should hire someone with an IT background who understands AI, process efficiency and can “get in there and actually build something” across an advice network that the majority of advisers could benefit from.
“[Licensees] could either take an existing team member, for example an Xplan expert, or they could bring someone in fresh who is more of the IT focused person who can help to build these processes,” Foley says.
Self-employed adviser Adele Martin agrees that having a full time AI person would free up time for other licensee members to do higher value and client facing work.
The appointment of an AI expert could redirect their team to do other things like support advisers in other ways rather than just being “this sort of compliance function”.
Foley explains that licensees must first understand the current IT stack across their network and from that recognise what AI tool the greatest percentage of their advice businesses would benefit from.
Licensees should then appoint an “individual resource to build out that process then to train a champion within each of those advice firms who’s going to own the process and consequently train each individual member of that team”.
If AI adoption is left to individual advice businesses, it will take several years to fully come into play and will prove to be very expensive.
“If you did it at licensee level, I’m guessing 70 or 80 per cent of businesses would be [at full adoption] in 12 months,” Foley says.
Licensees handling the implementation of AI prevents small advice businesses from sinking money into AI technologies that have no guarantee of being successful in the long term.
The Australian Financial Review reported on Thursday an MIT economist has predicted AI will not live up to the hype and a lot of money will be wasted.
His prediction is that only 5 per cent of jobs will be aided by AI – bad news for the companies investing large sums of money expecting that AI technology will increase productivity and as well as profitability.
If individual advice businesses try to adopt AI tools lacking the right knowledge, they can easily spend excessive money on technology they do not need or even want.
Professional Planner reported this week on the varying perspectives of compliance leaders in the sector, with one arguing it was too risky to put any proprietary business or client data into third party AI systems.
Despite the risks, AI can improve efficiency for licensees and advice firms alike and programs such as Microsoft Copilot and Chat GPT have proven to save time and money for advisers.
The implementation of AI can lead to a more compliant business with “more safety nets, reduced errors and greater efficiency leading to higher profitability”, Foley says.
Foley emphasises “a uniform approach conducted at licensee level” is the ideal way to introduce new AI technologies.
Martin agrees a uniform approach is most effective – “if everyone does this all individually, you sort of get these half-finished okay things”.
“If everyone pulled their resources and we just created one amazing AI or one tech teams, I think you’d get a lot more bang for your buck.”
