Advisers’ biggest AI concern: Accountability

Most Australian practices using AI have no formal policy for it. The Australian Advice Efficiency report from intelliflo has found that only 44 per cent have a formal policy and use approved tools.

The report, based on answers from 101 Australian financial advisers and advice businesses, where 82 per cent are using AI, also found that 34 per cent have informal guidelines only, 13 per cent leave it to individual discretion and 9 per cent say they are developing a policy.

One of the biggest concerns for advisers is accountability, says Pria Hussain, manager of customer success at intelliflo Australia.

“Advisers operate in a highly regulated environment, and while AI can assist with preparing information and streamlining processes, responsibility for the advice ultimately remains with the business.”

Hussain tells Professional Planner that the gap in the lack of formal policies needs attention.

“Firms need clear processes around data security, accuracy, oversight and when human judgement is required, so advisers can use these tools with confidence,” she says.

Advisers are also concerned about inaccurate or misleading output from AI (42 per cent) and data security and privacy (32 per cent).

When asked who is responsible for an AI error that causes a client loss, 52 per cent said the firm. The answers that follow seem to hint at who was answering, with 21 per cent saying it was a shared responsibility, while 14 per cent said it is the individual adviser. Seven per cent were unsure and 6 per cent said the licensee was responsible.

With 49 per cent of respondents saying clients’ demand for a seamless digital experience has increased, Hussain warns of adoption of technology for its own sake and advises firms to begin with the processes that create the most friction in their business.

“Look at where advisers and support teams are spending unnecessary time, identify opportunities to automate repetitive work and make sure any new tools integrate with existing systems,” she says.

“Importantly, bring the team along on that journey. AI will deliver the greatest value when people understand how to use it effectively, where its limitations are and how it supports, rather than replaces, their professional judgement.”

The three top areas that practices most want to digitalise are onboarding and fact find, SOA and ROA, and reviews and ongoing servicing.

AI’s current use and how it could be adopted

While most practices (81 per cent) use AI, the majority is for note taking with only 46 per cent using it for SOA, which is the stage that takes the most of adviser’s time – 32 per cent surveyed said it takes them more than four hours to generate the document.

Advisers (46 per cent) named capacity – not enough hours in the day – as the biggest constraint on growth.

“AI presents a real opportunity to give advisers back their most valuable resource – time. We’re already seeing firms use it to reduce the administrative burden of file notes, documentation and other repetitive tasks, but the greater benefit is what advisers can do with that time,” Hussain says.

“More capacity for meaningful client conversations, more personalised service and ultimately the ability to support more clients without continually adding resources.”

More automation of manual admin, AI for advice documents and file notes and better integration between systems made the top three uses of AI that would improve adviser’s efficiency in the next 12 months.

The next step is moving from individual AI tools and isolated use cases to a more integrated approach across the advice business, according to Hussain.

“Our research shows that while more than 80 per cent of firms are using AI, four in five have automated less than half their workflows,” she says.

“There’s clearly an opportunity to connect these technologies with existing systems and processes, particularly in areas like onboarding and advice document preparation.

“The focus now needs to shift from simply adopting AI to making sure it’s delivering measurable improvements in efficiency and client outcomes.”