AI is here, but can it help scale advice?

Artificial Intelligence (AI) can help solve industry challenges and potentially be an antidote to incrementalism, creating an industry wide opportunity to make advice more affordable and accessible to more Australians.

Advisers are already embracing AI, using it in their practices to record meetings and triage clients, streamline file notes, prepare documents and monitor compliance, all major breakthroughs in productivity.

Case study: AI in advice

Even if some advisers are not using AI directly, there is momentum building across the industry. The Financial Adviser Scale Squad Founder Adele Martin said she is excited by what she saw in the US with practices using AI to scale.

“We’re just beginning to see the impact of AI, but it’s already making a big difference in efficiency. In our business we have trained My GPT on all our marketing and client communication strategies, so it’s like having a world-class marketer on our team. Now, we can create emails, landing pages, and more in just minutes.”

Financial advice firm InvestBlue has experienced the benefits of AI firsthand in a recent pilot project with 20 advisers to automate file notes which delivered a two-hour time saving across the end to end client process. It is also working to deliver project 300, offshoring expertise and leveraging AI to assist the back-office advice process, to date creating a productivity uplift from 180 to 240 clients per adviser. 

Scale is the next hurdle

HUB24 Managing Director and CEO Andrew Alcock said technology is being used to automate repeat processes, but the key issue is scale: “We can use technology to deal with the mundane things to allow advisers to spend more time with their clients. We know we can create data and insights, but can we do it together to create scale?”

Industry experts said while incrementalism or change by degrees has historically limited the industry’s capacity to build scale and enable transformational change, greater collaboration across the industry and increased adoption of technology heralds a new era in productivity and the opportunity to pursue scale.

Rhombus Advisory’s Chief Advice Officer Darren Whereat agreed: “We don’t need to wait for regulatory change. There is the opportunity to face into these efficiencies now.”

Collaboration is key to industry meeting its purpose

Lack of investment, the breakdown of the industry’s infrastructure, integration challenges and the absence of collaboration have created a cycle of incremental changes which have not translated to meaningful productivity gains.

Regulation, compliance, manual processes, legacy systems have all slowed progress.

“Incrementalism is the word that we’ve seen in this sector for a long time,” said Entireti Managing Director and CEO Neil Younger. “But we have to find a different way to change the dynamic of the system.”

Despite this, the group agreed collaboration is greater now than ever before across the industry. For example, since 2018, several licensees have been involved in HUB24’s Think Tank which is using AI to solve industry challenges in advice delivery taking unstructured data such as file notes and advice documents and delivering proactive compliance monitoring, insights and benchmarking for licensees.

“We have got some really good capabilities but there is so much that is habit changing that is going to be required,” said Jason Entwistle, Strategic Development Director HUB24.

He added that understanding the collaborative role that AI can play is important.

“The highest cost resources that we’ve got are people that say, ‘oh isn’t this something that most junior people will use or replace them?’ And yeah, I think it’s us, the senior people that must really help people to understand it.”