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How will AI be used by advisors — and how can it be used safely and ethically ?

By Christopher Robbins

The wealth management industry immediately began to ask about the impacts of this emerging technology . When would it come into their businesses ? And how would it change the work of advisors and their support staff ? Some wealth technology companies moved quickly to implement generative AI applications in their platforms .

“ People are hungry for innovation and better ways of doing things , and for productivity ,” says Kelly Waltrich , founder and CEO of Intention . ly , a marketing engine for financial , wealth and technology firms . “ I ’ m someone who is fully embracing it and trying to figure out all the ways it is going to make me smarter .”

Yet as the hype around generative AI finally settles , technologists are asking deeper questions about its potential uses , its benefits and its shortcomings — and in many cases they ’ re finding that more caution and care is needed in choosing where and how to apply the new technology .

While Waltrich doesn ’ t believe the financial services industry needs to slow down in its embrace and engagement with AI applications , she does think that it needs to make sure it better understands the technology before the applications are put to use .

“ We need to be transparent about how things are working behind the scenes , and we need to be aware of what advisors are implementing ,” she says . “ Firms have a number of people available to work behind the scenes to do due diligence on

[ technology ] vendors . ... They need to know what ’ s happening on the other side of their screens .”

What Is It ?

Many financial advisors have been using some form of artificial intelligence for years in their technology stacks , perhaps without even knowing it . Many client relationship management and planning platforms have functions that allow advisors to choose their next best actions or give clients behavioral nudges . These functions are usually built on some form of intelligent data gathering and sorting capability . From the data , the software intuits what the best moves are for an advisor or client . Over time , the software becomes better at finding the best or optimal information that its user is seeking — just as a person learns how to do a job better with repetition .

Generative AI , on the other hand , offers something different : It can understand the natural language people write and speak with , and then it can generate responses in similar language ( or with images , audio or video ) that make sense in the context of the requests being made . Like previous iterations of AI , it also learns as it goes .

32 | FINANCIAL ADVISOR MAGAZINE | NOVEMBER 2023 WWW . FA-MAG . COM