How to incorporate AI into your advice business

Speaking on an upcoming episode of the ifa podcast, Sue Viskovic, founder of consulting firm Elixir Consulting, said that while there is often fear around the role that digital tools will play in providing advice, clients still require a human touch.

“If we look back a few years ago, when the talk of robo-advice came, there was some fear around that, and advisers worried that their role would be taken over,” Ms Viskovic said.

“I think it’s different to that, because I think we’ve evolved the thinking and we know that there can be algorithms that can calculate the right technical strategies for clients, but they do want a true advice relationship.

“They want validation, they want someone they can trust and a human that they can talk through their ideas and their irrational thoughts around finances and their decision making, and not only financial decision making, but overall, their goals and how they’re creating their best life that will still have a really important role for the human adviser to deliver.”

Ms Viskovic said advisers should explore the integration of tools like AI, whether in the form of ChatGPT or a more customised solution, to streamline and automate various business processes.

“What’s really beautiful is that with ChatGPT coming in, it’s really, I think, opened people’s eyes about what is possible. Now, ChatGPT is not something that advisers should be using with client work at the moment, because it does mean that their data is going out into the universe and there are some significant issues around privacy and so forth,” she said.

“So in terms of creating tools that are specific to a client base and client-related strategy work that is coming, but it’s not within ChatGPT. But we do see that people are starting to explore what’s possible, and that’s where we’re looking at maximising the opportunities for advisers, because there are very specific bespoke things that happen in financial advice businesses that don’t happen in other businesses.”

For instance, Ms Viskovic highlighted the role that AI bots can play within a specific CRM or advice software, emphasising their ability to enhance efficiencies, drive improvements, and pinpoint issues that may necessitate direct client engagement.

“At the moment, what we’re seeing is a lot of advisers are using things like ChatGPT for content creation. So, things in adviser language, general advice, if they’re writing articles about particular pieces of information, then that’s fine. It can be really effective,” she said.

“Certainly, if they train it properly to use their own style of language and discussion, it can be great to support clients, even looking at chat bots to receive inquiries from clients. It can direct them to what people already have within their library, that they can answer some initial questions if it’s just information not necessarily related to their personal [situation].”

Ms Viskovic added that while many firms are already utilising tools of some kind to streamline their processes, as they become more sophisticated, “guardrails” will become even more important.

“Already, a lot of firms are using some level of business process automation, and the use of these tools that I’m talking about are going to be able to really get that on steroids and automate more that doesn’t necessarily require human intervention and creation for error,” she said.

“This is where the parameters and the guardrails are incredibly important because it will learn as it goes, but you need to set it up appropriately for the different policies and licensing standards that are within any digital business.”

When looking at the model that firms should embrace, Ms Viskovic said that while most traditional advice firms that provide full-service advice would be “enhanced by AI and better process automation”, there is also room for a hybrid between full digital and traditional advice.

“If [an advice firm] has a big back book, for example, of risk-only clients that they have on file but may not be able to afford to service them with a full-service model, they can create that blended approach,” she said.

ifa’s podcast with Sue Viskovic will be published on Wednesday.