Financial Advisors Split on AI Adoption
From the desk of Jim Eccleston at Eccleston Law
Artificial Intelligence (AI) continues to dominate headlines, promising sweeping efficiencies in nearly every industry. Financial Planning reports that financial advisors remain divided on its role and value.
A recent Financial Advisor Confidence Outlook (FACO) survey by Financial Planning found that while most advisors use generative AI at least occasionally, they feel more comfortable applying it in their personal lives than in their practices. Another FACO study revealed that roughly four in 10 advisors harbor moderate concern that AI could eventually replace them.
Proponents of AI argue that these tools are meant to support, not supplant, advisors. They frame AI as an enabler that frees up time for advisors to focus on cultivating the human relationships at the heart of the business.
But advisors report that reality often looks different. Financial Planning reports that many advisors believe that prompting an AI chatbot can take longer than drafting communications themselves, producing results that are overly canned or only marginally useful.
Skepticism remains widespread. According to Arizent, the parent company of Financial Planning, about half of wealth management firms are embracing AI adoption, while the other half is holding back. Concerns extend beyond productivity. Clients may question the value of paying for professional advice if they suspect their advisor relies too heavily on machine-generated work. Financial Planning reports that a recent Morningstar study confirmed that suspicion of AI use can directly diminish the amount clients are willing to pay for services.
According to Financial Planning, fraud prevention is another critical consideration. Advisors play an essential role in protecting client assets, yet shortcuts touted by AI tools may create new vulnerabilities. Some advisors caution that over-reliance on AI risks weakening critical thinking.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, ai
