Using generative AI to enhance your advice process

As AI continues to become more prevalent in everyday technologies, Vital Business Partner’s (VBP) head of growth David Carney explained in a blog post that the advice profession must stay up to date with the potential applications of these technologies in their business processes.

According to Carney, advisers should be using AI as a co-pilot throughout their processes, such as using it to analyse and summarise a client’s information and activities in preparation for an annual review.

“This would obviously speed up the whole review process and free up the adviser’s time to focus on the interaction with the client themselves, i.e. majoring in the human component of the interaction, while the co-pilot could ‘major’ in the data side of the process,” he said.

While he noted that the average adviser is managing between 100 and 120 clients, Carney argued that utilising AI in this way could allow advisers to save time and take on a heavier client load.

As the advice profession struggles to grow in numbers and looks for ways to increase its efficiency and client capacity and reduce costs to meet the high demand for affordable advice in Australia, Carney said that, with the help of generative AI, advisers could achieve these goals.

“The increased use of AI co-pilots in financial advice is one of the three factors that should hopefully change the industry landscape by bringing down the cost while also increasing adviser capacity and making it available to more people,” he said.

”The other two factors are the Quality of Advice Review recommendations and being able to use global best pricing through outsourcing. These three things combined should make it much easier and more cost effective to deliver advice.”

Protecting client data

While he recognised the potential of generative AI in advice, Carney also said advisers need to be cautious when introducing the technology into their businesses and data hubs.

Carney explained that while medium to large firms may be able to better ensure the protection of clients' data by using technology that only exists within their business, most smaller firms lack the scale to do so. This, he said, can lead them to use technology that also functions outside their ecosystem, which could potentially compromise their clients’ data.

Additionally, he argued that advisers have an obligation to notify their clients of the use of generative AI in relation to their personal data and ensure they have adequate measures in place to protect it as laws struggle to keep up with technology.

“Financial advisers have legal obligations to their clients around the advice they provide and would be foolish to rely solely on anything generative AI provides in response to questions. But financial firms also need to consider the security of the client data they hold and how AI might be used,” Carney said.

”In the absence of any explicit laws around the use of generative AI in Australia, any financial planning company considering using generative AI needs to have written policies in place about how client data is being used to train AI and clients need to be made aware and approve of these policies.”

“AI is transforming industries and professions, and advisers must be prepared to adapt and evolve. While this, of course, involves understanding the technology and how to use it best in practice, it also means understanding and focusing on what an actual ‘human’ can bring to the experience for clients.