Next-Gen Advisors Upbeat on AI: Survey

Younger financial advisors are generally optimistic about the emergence of artificial intelligence in wealth management, according to a survey released Wednesday by Advisor360°, a provider of integrated technology for enterprise wealth management firms.

Sixty-four percent of younger survey participants, whose average age was 36.5, called generative AI a help to their practice, and 57% said it would benefit the industry. In contrast, 21% saw generative AI as a threat to their personal livelihood, and 31% said it is a threat to the industry. 

Next-gen advisors’ optimism toward AI suggests that it has a prominent role to play in wealth management, with 34% expecting the back office to benefit and 25% the front office. Just 16% of respondents said neither will benefit. 

Survey participants indicated that the biggest challenges they face in their existing tech setups are bad data and insufficient AI-enabled capabilities and end client capabilities.

“The up-and-coming generation of financial advisors sees generative AI tools as potentially effective for growing and managing their businesses,” Darren Tedesco, president of Advisor360°, said in a statement. “Advisors are looking to AI to take on administrative and operational tasks so they can focus on higher value activities, like meeting with current and prospective clients.” 

How do clients view AI-generated advice? A majority of participants in a recent survey said they distrust it. At the same time, a similar majority said they would be more confident about acting on advice from generative AI after they had vetted that advice with a financial planner.

Coleman Parkes Research fielded the survey in September and October among 300 financial advisors and executives at large broker-dealers, RIAs and bank trust companies across the United States. Participants were employed by enterprise wealth management firms with an average of $9 billion in assets under management and more than 1,000 employees.