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Tech & Operations continued from page 26

an advisor , by virtue of the analytic power of AI and the efficiencies it creates , is able to take on the management of a client ’ s household in ways that go beyond addressing their financial needs .

Similarly , most of the technologists Financial Advisor talked to who are working with AI believe that it will augment , not displace , knowledge workers like financial advisors . With the help of generative AI , content will be created more efficiently , with greater ease and ( eventually ) with greater accuracy — but any content generated by AI will still need to be carefully edited .

That is due , in part , to generative AI ’ s tendency to “ hallucinate ” or fabricate data that looks and sounds real but was really created out of thin air . While such behavior can be reduced or curtailed by carefully establishing parameters around AI programs , there is no foolproof solution .

“ Where is generative AI most useful ? When you have a task that is somewhat deterministic , that has a deterministic output ,” Malhotra says . “ So something like writing software code , you write code , run it and you get output , it ’ s very deterministic , and AI is excellent at making that way faster .” However , he adds , “ At the end of the day , there ’ s a lot of subjectivity in financial services that AI is not going to be able to displace .”

In the near term , that means the tech will simply make human advisors more efficient — and that will help them solve a demographic crunch facing the industry , as the number of advisors declines even as the demand for their advice grows .

“ This is something that is going to help advisors scale and ultimately serve more customers ,” Fava says . “ Generative AI could be a tipping point — a piece of technology that finally really does free advisors to meet face-to-face with more customers — but it won ’ t replace advisors . It will be a force multiplier .”

Yet , at the same time , AI is likely to spur a new acceleration in the development of wealth technology advisors can use to serve their customers and streamline their businesses , Malhotra says .

“ Our take is that it will dramatically speed up the development of any wealth tech ,” he says . “ We can produce new technology and launch new products weekly with advisors and clients , and we can do more with smaller teams . There will be more acceleration in wealth tech products .”

JULY / AUGUST 2023 | FINANCIAL ADVISOR MAGAZINE | 59