Produced in partnership with HUB24.
The benefits of artificial intelligence (AI) are immense, including increased automation, faster and smarter decision-making, and an enhanced client experience.
In professions and industries like medicine, retail and investment management, AI is being used to analyse vast volumes of data to accurately diagnose conditions and create treatment plans, identify trends, and produce more reliable forecasts.
However, the advice profession’s response to this enormous opportunity has been relatively slow.
The majority of advisers are looking to business partners, including licensees and platforms, for guidance and investment in technology and AI.
Advisers don’t have to go on the AI journey alone, said Evan Morrison, who heads the Innovation Lab at HUB24.
“Partnering is about working together to solve problems and capture opportunities, and no one has to do this alone,” he told a roundtable hosted by Professional Planner, held in partnership with HUB24 earlier this month.
HUB24 established the Innovation Lab in 2018 to drive operational efficiency and enhance customer experience. An example of this is the group’s digital mail house which uses AI to read, classify and process up to 17,000 documents per month.
This capability is now being leveraged to solve similar challenges for financial advisers.
HUB24, in turn, taps the resources and expertise of its “infrastructure and ecosystem” partners including Microsoft, Google and Amazon.
Piggybacking off larger companies with sizeable IT budgets and resources is a “commonsense approach,” said Nick Perrett, chief executive of Melbourne-based advisory firm, Yarra Lane.
“We’ve been able to save time, increase productivity and improve the client experience without spending a lot of money and that’s really exciting for business owners because they can actually achieve a lot with a relatively small capital outlay and ongoing investment,” he said.
Yarra Lane leverages the resources of its outsourcing partner, Vital Business Partners, which has over 1200 team members, the majority based in the Philippines.
Assisted by VBP, Yarra Lane has been using AI and robotic process automation (RPA) consultants to drive operational efficiencies.
RPA is enhancing the group’s ability to plan ahead. For example, annual review invitations can be automatically drafted for advisers through Microsoft Outlook calendar, based on the dates of earlier calls and meetings. Personal insurance renewal reminders can also be automated.
Yarra Lane-branded templates are used to pre-populate and draft emails which advisers review before sending to clients.
“Across the business, calendars are automatically reviewed daily, overnight, and that’s exciting because I feel like our planners are working throughout the day and our bots go to work at night,” Perrett said.
“When a meeting is coming up, [our bots] can access systems, download reports and save them in [Microsoft] SharePoint. A lot of the heavy lifting is done so our advisers are ready to go and this lets them focus on what we see as valuable; talking to clients.”
Yarra Lane has identified an additional 50 internal processes that can benefit from automating parts of the process.
Business transformation
Businesses need to have an intimate understanding of their processes and the problems they are trying to fix in order to get the most out of AI and RPA, said Vital Business Partners CEO Nathan Jacobsen.
“Solutions can be built pretty quickly, like in a matter of months, if you’re clear on those things,” he said, emphasising that the benefits aren’t just for advisers and clients, but also support staff because they can be freed up to focus on more interesting work.
For all the talk of AI displacing workers and making roles redundant, Jacobsen claimed it can help firms hold onto good people by reducing the risk of employee dissatisfaction and boredom.
Sydney-based financial advisory firm, AGS Financial Group, which employs around 80 people including 18 advisers, started its transformation journey almost a decade ago with a comprehensive review of the group’s systems and processes.
The firm’s CEO, Paul Bolstad, estimates that the business spends around $500,000 per year on IT including employing a full time IT manager and software developer. Previously, AGS employed two developers to build a customised version of Salesforce.
“Cost is definitely an inhibitor for the average advice firm but, at our size, we believe our approach delivers the best bang for buck,” he said.
“With an inhouse developer, we can customise and develop the platform for our business, and that’s great because our focus is much more on systems, processes and automation.
“We now look at [AI] solutions, and classic examples are Filenote and [Microsoft] CoPilot, but before we go down a particular road, we need to fully understand and document our processes.”
AGS, which has around 3000 client groups, securely records, stores and updates client information using Salesforce. This information forms the basis of file notes and advice documents.
Salesforce is integrated with online appointment scheduling software, Calendly, which automatically schedules around 70 per cent of client meetings.
“Everything an adviser needs for a client meeting is in one place and, if a client’s situation has not changed significantly from one year to the next, for example, if their goals are the same, and their assets and liabilities are roughly the same, a basic client review can be conducted fairly quickly,” Bolstad said.
“Our system can automatically send calendar invites, and as soon as a meeting is accepted, [Salesforce] automatically gathers all the necessary information for the adviser including fact finds, client reports and investment portfolio reports.”
According to HUB24’s Morrison, one of the most common, practical applications for AI, which encompasses machine learning and large language models, is turning unstructured data, like emails, voice memos and transcripts, into structured data.
This is important because structured data is easier for computers to understand, process and analyse.
What’s next?
Looking ahead, Morrison believes there are two main areas where advisers can extract value from AI: firstly, natural language automation and, secondly, thinking and reasoning models.
“Last year saw the rise of advice tech, primarily voice and file notes, for transcribing and summarisation, and that can definitely deliver productivity gains, but there’s much more [value] to come over the next 12-24 months,” he said.
“We’re going to see models that have been trained to think and process a chain of thought, which reduces hallucinations and is likely to deliver better quality answers.
“This will lead to a shift towards more knowledge-based work and be a key driver of the next wave of productivity.”
Yarra Lane’s Perrett said many advice businesses have been doing great things for a long time but “probably just too slow”.
“We’d all like to be faster and more efficient but I’m not sure business owners want their SOAs generated by AI,” he said.
“They’ve worked hard on their brand and they want to guard it. There’s a place for AI but business owners still want control over how their documents look, feel and sound.”
Jasia Fabig, general manager at Fitzpatricks Advice Partners, agreed but questioned how much value clients placed on advice documents.
“We put a lot of effort into our advice documents and want them to reflect our brand but how we do things is not necessarily how the market wants advice delivered,” she said.
“There’s a real opportunity [to drive efficiencies] but there’s a change management piece because some advisers are wedded to their processes and believe the way they do things is the best way.
“In some client meetings, there are two people, sometimes three, taking notes, and that’s the base that many firms are coming from so there needs to be more education on why the use of AI makes sense and creates capacity, and also why that’s better for top and bottom-line growth.”
At Entireti, which includes Fortnum Private Wealth, Personal Financial Services and Akumin (formerly AMP Financial Planning, Charter and Hillross), there are AI leaders and latecomers, said Nick Hilton, Entireti’s executive general manager of advice delivery.
AGS, which is licensed by Akumin, is a clear leader but across the network, businesses are at various stages.
In the short-term, Entireti has a modest target to get the majority of its 400 advice practices and 1300 advisers using AI tools to prepare file notes, which Hilton estimated should deliver a 20 per cent time saving.
“It’s not that [their] file notes are bad, but they take longer to prepare than they should,” he said.
At the other end of the spectrum, Entireti is also testing a number of AI tools including prompt libraries, which provide curated, tested and optimised inputs that are designed to give instructions and elicit a specific response from AI systems like CoPilot.
One of the group’s top priorities is to help advice practices navigate the AI opportunity “safely,” Hilton said.
“The principles and guidance we give is aimed at keeping our people, advisers and clients safe. Some of that [guidance] is around vendors because we want firms to engage vendors that can grow with them.”
“We’re testing the complex stuff and supporting advisers through it.”
Arch Capital, a Sydney-based boutique private wealth firm, has been on a mission to make advice accessible and affordable to more Australians. In 2019, the firm’s managing director, Nigel Baker, established Scientiam, a low-cost digital engagement platform that provides financial education and learning resources and calculators, and simple superannuation and investment accounts.
Users can also be connected to a financial adviser for personal advice, as their advice needs change.
More recently, Scientiam has started using AI to produce and distribute regular content including articles, videos and podcasts.
“We were a small practice looking after 100 or so clients and now we might serve 800 or so clients but we’re not advising all those people,” Baker said.
“We just wanted to get them started on their advice journey, so they didn’t go down the wrong path.”
Baker clarified that Scientiam does not give advice but rather “education and engagement”.
The platform, which is currently white labelled by around 30 advice firms, can be used to support intergenerational clients, and C & D clients, and also provide lead generation.
Trial and error
Interest in AI and how it can be used safely to drive productivity and create capacity is extremely high at Centrepoint Alliance.
The ASX-listed group, which has a community of over 200 practices and 550 advisers, regularly hosts webinars and sessions on AI, which over 200 people routinely attend, despite a recent survey finding that 60 per cent of member firms don’t use AI.
Like Entireti, Centrepoint is actively trialling and testing potential solutions but, more often than not, it’s the group’s advisers who bring ideas to HQ, said Henry Cai, head of advice technology.
“A small number of firms are leading the charge and we run ideas past them,” he said.
“More times though, it’s advisers telling us about AI tools and solutions, and asking us to investigate. We do basic checks around data, privacy and cyber security to give them a level of comfort around using those solutions.”
If, through that process, Centrepoint identifies a solution that could be beneficial for the broader group, it may look to enter a strategic partnership.
Centrepoint’s goal is to bring every practice on the AI journey and ensure no one gets left behind.
The best results are achieved when people who actually understand advice businesses are involved in developing the tech, according to Cai.
“Practices that engage a third-party Microsoft [RPA] contractor will not get the best results because they’re tech people, not advice people,” he said.
“Just try explaining an SOA to a developer. They don’t speak our language, which is why there’s usually a huge disparity in the results you get from an external developer versus someone who’s close to the industry.”
Regulatory roadblocks
While AI can deliver many potential benefits, roundtable participants also voiced their concerns about the threat of cybercrime and data breaches, with cybercriminals increasingly using AI to launch more sophisticated, scalable and targeted attacks.
ASIC has also been very clear that cyber security and resilience is a key area of focus. The regulator has recently published information and guidance to help financial services companies improve their cyber security posture.
VBP’s Jacobsen believes that the advice industry is exposed because there is still a lot of reliance on attestations, “which is a long way from information security”.
“We need real time monitoring, endpoints and intrusion protection,” he said.
HUB24’s director of strategic development, Jason Entwistle said the group took its obligations around governance, privacy, and risk management extremely seriously.
“We continue employing more and more people in disciplines that we’ve never thought about before because we want to do more in this space but there are challenges, roadblocks and regulatory issues,” he said.
“Advisers are leaning on us to lead in this area, and we definitely see this as an important part of our role. From a regulatory perspective, [AI] is no different to any other technology in a regulated business. You’ve got to be completely sure that everything is done right and safely, and that no rules are breached.”
Money and passion
According to Bolstad, commencing an IT transformation program is a serious, long-term commitment that should only be undertaken by businesses that are focused on growth.
“We were a lot smaller when we started and $500,000 per year was a massive investment but we did it because we knew we were going to grow,” he said.
“If we just cruised along, we would never get a return on our investment.”
It also helps to be “super interested” in technology and advancements in this space, Perrett said.
“The results [we’ve achieved] so far are staggering and I’ve never been more excited about what’s ahead,” he said.
“We are going through every process in our business and looking at ways we can improve, and the potential is tremendous.
“At the end of the day, clients value relationship, so if you can put processes in place to allow more time to build stronger connections and relationships, that’s better for advisers and clients.”
