Financial advisors are becoming more comfortable with artificial intelligence (AI) and incorporating it into their day-to-day life, according to a new report by eMoney. 

The firm released its findings during a panel discussion during the online eMoney Summit last week. It polled 400 advisors and found that 27% believe AI is a major opportunity that should be acted on quickly, while 72% said the technology provides opportunities but also poses potential risk and requires a cautious approach. 

Charles Chaffin, a psychologist with the Financial Psychology Institute who spoke during the conference, said that skepticism about AI grows with age, and that those with more than 20 years of experience were more skeptical of AI than younger advisors. 

“The other element why there is a bit of cautious optimism ... there are some firms that have communicated and provided a ton of guidance to advisors on the use of generative AI and then there are some firms [where] there’s still a disconnect for whatever reason,” he told the audience. “Some of it could just be the stage at where your firm may be that cause you to be a bit more skeptical.” 

Fears among advisors that they will be replaced by AI are starting to subside, as 90% said clients will still need a personal advisor despite the increased use of AI, according to the survey.  Still, 34% of advisors said they do fear being replaced.

“That human element is so important,” said Brad Klontz, also with the Financial Psychology Institute. “It’s not just all numbers. You want to be able to have someone you can call when the market’s crashing, and not just read an algorithm, to coach you through what’s happening and you want to feel as if you are connected to somebody.” 

Advisors are beginning to see the benefits AI can bring to their practice, with around 75% saying AI boosts their productivity and client value, according to the study. In addition, more than 50% see AI helping to improve client relationships, holistic planning, and client acquisition. 

The study found with more than 25% of advisors are using AI for client communications and more than 25% are using it to help summarize client notes. Also, 25% are using it for market research.  

Seventy-one percent said they want to use AI for performance analysis, while 70% want to use it for automated planning, 70% want it for portfolio management and 70% see it as a tool for assessing client attitudes and behaviors, the study found. 

Ninety percent of advisors said they will need to acquire new skills to use AI. 

“They believe advisors will need to start to acquire new skills to differentiate themselves from this kind of advanced technology, which leads them to more human-centered skills like critical thinking, adaptability, creativity [and] even the interpersonal skills in addition to having that technical expertise,” Emily Koochel, manager of financial wellness at eMoney, said in an interview.