Artificial intelligence (AI) has moved from sci-fi fantasy to everyday reality. It’s no longer a futuristic concept—it’s a practical tool transforming financial advisory. AI offers incredible opportunities to enhance client services, streamline operations, and drive business growth. While 60% of financial advisors already (or plan to) use AI, others remain hesitant to fully embrace it.
Why?
They’re fearful of AI’s implications or unsure of its real, bottom-line benefits.
So, let’s explore it in more depth.
If you’re curious about how AI can benefit your advisory services or looking to take the next step in your AI strategy, keep reading. This guide will dive into:
- The common fears financial advisory firms have about AI,
- The opportunity cost of not using AI, and
- Actionable strategies for integrating AI to enhance and scale your practice
Let’s get started.
Common fears about AI in financial advisory
There’s been a lot of excitement about AI, especially over the past few years. In fact, when it comes to music recommendations, time-saving routes, and texting autocorrect, most people just ride the wave. They don’t stop to marvel at the fact that AI is powering the experience they’ve come to love (and now expect as the “norm”). They fully welcome and embrace it.
When it comes to AI in financial advisory, however, the response is different. Among the hundreds of financial advisors we’ve spoken to, we continue to hear the same concerns regarding the use of AI in their practices.
1. Loss of personal touch
One of the biggest concerns financial advisory firms have about AI is the potential loss of the personal touch. Financial advising is and has always been a relationship-driven business built on trust and personalized advice. The idea of AI stepping in can feel like a threat to the human connection that forms the foundation of advisory services—and, therefore, a risk to client relationships and satisfaction.
2. Compliance and security concerns
Sometimes it feels safer (and easier) to do what you’ve always done—to take the traditional, “proven” path. This is very much the case for professionals who work in highly-regulated fields, including financial advisory.
Due to stringent regulatory requirements and the sensitive nature of financial data, financial advisory firms are often hesitant to be early adopters of new technology, including AI. While the excitement of using AI may pique their interest, ensuring that AI tools adhere to legal standards, such as those governing client privacy and data protection, leaves them paralyzed in their tracks. They want to avoid potential fines and legal issues at all costs.
3. Complexity and cost of implementation
The name itself—artificial intelligence—doesn’t exactly give off “simple” vibes. Afterall, AI can take what used to be days of time-consuming, manual work for an entire team and compute results in seconds. It can simplify complex and repetitive tasks. Unfortunately, because of its speed and output, AI systems can also appear difficult and expensive. Unfortunately, this can deter financial advisors from adopting them. The perceived high cost of AI technology and the complexity of integrating it into existing systems can be overwhelming. Many advisors fear that the investment may not be justified if the technology does not deliver immediate, measurable benefits.
Your clients live in a world of AI. They have grown accustomed to fast and accurate AI-powered interactions with brands like Spotify, Netflix, and Amazon. While you’re not competing directly with these giants, your clients still expect the same level of personalization and engagement. Avoiding AI isn’t playing it safe; it’s giving your clients a reason to look for a more forward-thinking financial advisor.
In fact, a recent study by Northwestern Mutual shows that many Americans are excited about the changes AI will usher into wealth management. More than half of Gen Z’ers (57%) and Millennials (55%) say they are excited about the potential of AI/GenAI in the financial services industry. More than half of Gen Z’ers (63%) and Millennials (57%) also say AI will improve the customer experience in the financial services sector, including with financial planning.
They’re ready for it. Are you?
The costs of not using AI in wealth management
Financial advisory firms that keep AI at bay, even if it’s just to “wait and see” how everyone else is using it, are finding themselves at a competitive disadvantage. Just like with all investments, there’s a price paid for not jumping on a promising opportunity. Not only do they stand the chance to lose clients to more tech-savvy competitors, but they also let long-time inefficiencies drain their resources just because “that’s the way it’s always been.”
1. Missed efficiency gains
One of the primary opportunity costs of not using AI is the missed efficiency gains. Time is money, and AI frees up valuable time by automating repetitive tasks such as data entry, portfolio rebalancing, client reporting, and much more.
By not adopting AI, advisors continue to spend time on mundane tasks and less on high-value activities like client relationship building and strategic planning—which is where they add the most value. Take meeting prep, for example. Another recent study found that financial advisors spend an average of 75 hours a month on client meeting prep, a routine task that AI can simplify and can reduce dramatically.
2. Limited data insights
Because AI has the power to analyze large amounts of data quickly and accurately, it can surface insights that can drive better decision-making. Without AI, financial advisory firms might rely on outdated or incomplete data, potentially missing out on valuable trends and opportunities. This limitation can affect the quality of client outreach efforts, advice provided, and ultimately impact client outcomes.
3. Inability to scale
Scaling a financial advisory practice often requires significant resources. Financial advisors can only take on as many clients as time allows. AI can help advisors manage larger client bases by automating processes and providing scalable solutions that free up their time. By not leveraging AI, advisors may find it challenging to grow their practices efficiently, limiting their potential for expansion and profitability.
By delaying adopting AI, financial advisor firms often miss out on opportunities to streamline operations and enhance client engagement. (Ironically, these are the outcomes they’re trying to avoid by avoiding AI.) This lag can lead to inefficiencies and higher operational costs compared to peers who use more advanced tools for automation and data analysis.
By now, you may be asking yourself how you can start using AI to capitalize on the benefits, safely and securely.
We’ve got you. Here’s how.
5 ways financial advisory firms can use AI to improve and scale their practices now
AI may still feel a bit out of your comfort zone. We get it. Reading one article likely hasn’t convinced you to go all in, and that’s more than ok. Here are some high-impact use cases for AI for you to consider. As you read through them, ask yourself where AI might streamline your processes and give you time back to focus on things that grow (and retain) your revenue. That’s where you should begin testing.
1. Meeting assistance
Taking detailed notes while staying fully engaged and present with your clients can be challenging. What’s even more challenging, is spending hours after the meeting logging those notes, sending summaries, creating tasks, executing those tasks, monitoring their progress, etc. You get it. It’s a lot of time-consuming manual work. But, it doesn’t have to be.
With Zeplyn, you can tap into the power of AI to take care of all of that for you. Zeplyn, which is designed specifically for financial advisors, captures secure and structured meeting notes (for virtual or in-person meetings) and logs them into your CRM. It also automatically triggers the next steps following your meeting: client recap email, task creation and assignment, and much more. And here’s another bonus: With 100% of your meeting notes automatically logged to your CRM, Zeplyn also enables you with more client intelligence, surfacing conversational insights and trends.
2. Investment management
Financial advisors can significantly enhance their practice by leveraging AI-powered investment management software, which offers advanced analytics and real-time data insights. Such tools can help advisors analyze large amounts of financial data quickly and accurately, identifying trends and opportunities that might be missed through traditional methods. It can predict market movements and optimize portfolio allocations, helping advisors make more informed decisions and tailor strategies to individual clients’ needs.
Take Boosted, for example. This AI software summarizes news from across 60,000+ publications, earnings calls, and impact reports, to save you hours of research time. It also surfaces actional ideas based on the stock you care about most and gives you the ability, through its portfolio modeling feature, to see how specific changes would impact portfolio health.
3. CRM insights
Your CRM holds valuable information about your clients. And sometimes, it just sits there. However, using AI to surface and prioritize high-impact tasks can be a great way to maximize client satisfaction. It allows advisors to address urgent and high-value scenarios while there’s still an opportunity to capitalize on it (and before something becomes a problem).
Responsive’s Predict does just that. It uses AI and the data within your CRM to uncover and prioritize the next best action with the highest ROI. It helps you identify opportunities and risks that matter both to your client and to your business, so you can take action quickly and efficiently.
4. Prospecting
Finding new clients isn’t always easy. Referrals are great, but the passive approach, alone, may not be enough to sustain or grow any financial advisor’s business. Knowing who to target (and where to invest marketing dollars) is key, and that’s where AI can help.
AI-powered prospecting and marketing tools like Catchlight can help. Catchlight can predict which leads are most likely to convert (and which ones you’re wasting your time on), surface deep insights about those leads, and suggest engagement ideas based on those deep insights. This helps you connect with the lead and convert them faster.
5. Proposal generator
Financial advisors invest a lot of time and energy building investment proposals. Not only do they need to conduct research that analyzes client data, investment goals, and market conditions, they also need to build a well-structured and personalized proposal that aligns with each client’s specific needs. It can be a time-intensive exercise. Luckily, it’s one that AI can take on.
AI-powered proposal generators automate and refine the creation of customized investment proposals, enhancing both efficiency and accuracy. The software’s ability to integrate real-time data and sophisticated analytical tools ensures that proposals are not only relevant but also grounded in the latest market insights. VRGL, for example, uses AI to create actionable proposals within minutes—empowering advisors with meaningful insights that help them start investment conversations (and demonstrate their value) faster.
Conclusion
AI is revolutionizing financial advisory practices, creating new value in the form of efficiency, data analysis, and client personalization. While it’s normal to have reservations about adopting new technology, the opportunity costs of not embracing AI are too high. It’s one of the major levers financial advisory firms are pulling to better service their clients and position themselves for growth.
And remember, embracing AI doesn’t mean replacing the human connection. It should enhance decision-making, streamline operations, and ultimately deliver better outcomes for you and your clients.
Start exploring how AI solutions can transform your financial advisory practice. Start your free trial of Zeplyn.