And AI certainly provides scope for financial-advisor-friendly innovation. Human advice based on an experienced and professional evaluation of a client’s situation isn’t going away. And if a raw evaluation is enabled and delivered via AI, so much the better: it’s bound to speed things up while providing verifiable backup for the FA’s advice.

Plainly, your understanding of situational nuance isn’t subject to automation. Nor can even the most sophisticated automaton replace you in empathizing with someone who’s in a tight spot and helping them to feel better, both by means of your counsel and your demeanor.

Hybridization

After all, you can always get a cup of coffee from a machine — but you can never, ever, have a cup of coffee with a machine.

That’s not to gainsay so-called robo-advisors like Wealthfront and Betterment. Robos make sense for some sub-mass-affluent and emerging-affluent clients whose finances are straightforward. Still, it’s telling that many robos now offer access to human advisors in conjunction with AI-enabled planning and portfolio-design services. And it’s telling too how much more pervasive robo technology is as an “Intel Inside” for hybrid platforms at established firms than as a standalone offering.

Besides potentially enhancing advisor-client interactions, AI has the potential to help FAs and analysts cut through distracting data and zero in on delivering better insights around financial planning and portfolio management.

But, like any technology — or better: technology cluster — AI isn’t plug-and-play. Further, as a nascent offering, it’s not error-free.

In operational terms, RIAs must know what’s being delegated to AI within specific business processes. This calls for staff training around (and about) AI, strict policies, procedures and standards for monitoring its performance.

Trust but verify

Backup and replicability for AI outputs is especially important in this age of distrust. Trust in authority figure, including FAs, has waned. According to industry sources, 23% of social-media users say they have accidentally or deliberately shared a “news” story they knew to be ingenuine, 64% of Americans say “fake news” is sowing confusion in our everyday lives, and 51% feel this is unlikely to improve.

It’s so well known that misinformation is being widely and constantly disseminated people have grown reluctant to believe experts, preferring to seek comfort in the conformation of their pre-existing biases rather than be challenged by inconvenient truths.

The erosion of trust as a societal trend should matter to advisors of all stripes. Where trust in titles and credentials is weakened, your clients’ trust in you is increasing based on their direct experiences with you. AI, in concert with other tools, can help you enhance those experiences.