Nearly half of advisors plan to adopt artificial intelligence in their practices in the near future, according to a survey of 100 advisors conducted by 8 Acre Perspective, a financial industry researcher.
According to the survey, “AI to the Rescue,” only 12% of advisors said they now use AI in their practices and 40% said they have no plans to adopt its use.
Among those using or planning to use AI, 65% said they want to use it to communicate with clients and 45% said they want to use it for marketing or to prospect for new clients.
“We believe generative AI is the answer [to improved communications]. Early adopters will have a massive advantage over their competitors who are either unwilling or unable to embrace," Matt Schiffman, CEO of Totumai, a technology company that focuses on improving communications between advisors and clients and conducted the research, said in a statement.
“Most importantly, it has the potential to let advisors customize client engagement to a granular level, vastly improving the investor experience and deepening client relationships at scale,” he added.
Of the advisors who participated in the survey, 58% said compliance issues and 49% said a lack of familiarity with AI are why they have not adopted the technology. At the same time, 54% said finding enough time to spend with each client is challenging and 68% said scaling their practices is difficult.
When the participants were asked where they would prefer to spend their time, just 25% said they wanted to spend more time on investment management, while 66% said they wanted to spend more time on client-facing activities, and 45% said they wanted to spend more time on prospecting and marketing.
“Financial advisors struggle with the constraints on their time. While almost all advisors believe personalization is important, just 10% said they have personalized interactions with all of their clients,” 8 Acre said in a prepared statement.
Twenty-nine percent reported they had personalized interactions only somewhat or not at all.
“Meeting consumer expectations for greater personalization can be challenging, but also represents an opportunity for the financial services industry to come to parity with other parts of consumer’s lives,” Jim Neuwirth, president of 8 Acre, said in a statement.