Nine in 10 advice firms anticipate increased speed and operational efficiency through AI use, research from NextWealth has revealed.
NextWealth’s AI Index report looked at firms' approach to AI, finding a positive attitude towards its use in many areas.
Some 83 per cent of respondents considered using AI in automation of suitability assessment and reporting, 79 per cent were looking at using it in supporting CRM activities, and 67 per cent said they were considering AI in compliance and case checking.
However, the majority of advice firms reported they have no plans to use AI in fraud detection or client interaction.
NextWealth managing director, Heather Hopkins, said: “We are tracking the use of AI as part of AI Lab because we see it as a game changer.
“It will improve client experience, and reduce costs to serve and increase access, but AI also has the potential to make the job more fun for advisers and their teams.
“There will be less of the menial slog, less risk of human error, freeing up headspace to do more thoughtful human work for high-value clients.
“While at NextWealth we’re admittedly AI enthusiasts, we think that’s pretty exciting.”
Barriers
However, Hopkins acknowledged that, while advice firms were “waking up” to the benefits AI can provide, there were some “major hurdles” that needed to be crossed along the way.
The most significant of these hurdles was found to be the ability to integrate with other systems, as a total of 71 per cent of respondents identified this as a somewhat or very significant barrier to adoption.
This was ahead of data availability and connectivity, identified by 66 per cent of respondents as a barrier, regulation and compliance (59 per cent), and relevant AI-powered solutions (54 per cent).
In contrast, client concerns were found to be the least significant barrier to adoption, only being identified by 25 per cent.
Additionally, wealth management firms told NextWealth that myriad tech providers are offering AI solutions to solve all manner of challenges, prompting the issue of whether to partner with a tech giant or vertical specialists.
Hopkins said: “We think that there are plenty of opportunities for all types of providers as AI will be implemented across businesses in various functions.
“That said, when it comes to the delivery of regulated advice, we think specialist solutions dominate while vertical specialism is less relevant for solutions supporting data requirements and back-office efficiency.”
tom.dunstan@ft.com
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