‘Overpromises and underdelivers’: Has AI delivered on the hype in financial advice?

Despite artificial intelligence (AI) being treated as a potential “silver bullet” that would solve the woes of financial advisers, the joint managing director of Finura Group, Peter Worn, said that AI largely “overpromises and underdelivers” on what it could do for the advice industry.

“We saw a lot of pretty bold claims from tech providers in our sector who were claiming that their technology had some weird and wonderful, unique AI that was going to revolutionise financial advice, produce statements of advice in seconds, not hours,” Worn said on a Finura webinar.

“And quite frankly, these claims didn’t actually come to pass. No one was actually able to provide evidence that they were actually doing it. And many of our clients and partners that were trialling some of these solutions found that that just wasn’t the case.”

While AI certainly had a tight grasp on the industry in 2024, Worn said that the immediate sensationalism around it began to wear off as the year went on, leaving advisers with somewhat more realistic expectations.

“Firms, firstly, really became more open to using AI. They understood that it’s got to be part of their roadmap and they’ve got to think about it and not be scared,” he said.

“Conversely, what we saw with firms is that whilst they weren’t scared of it, they became a lot more realistic about the challenges of implementing it.”

Worn added: “I think from where we sit, we absolutely saw probably this idea where we almost overestimated, like I think a lot of people, what AI could do for us in a short period of time. I think we’re underestimating what it’s going to do in the much longer term.”

Likewise, Finura head of consulting Danni Le Grande suggested that AI technology still has a role to play in the advice process, but it will not be the cure to all of the industry’s problems.

“I think maybe the reality has set in, and I think maybe in that initial, say, 12 months beginning 2024, there was that real excitement that AI was going to solve all of our problems and we could hit a button and get an SOA done in 35 seconds, or whatever it was,” Le Grande said.

“But I think the reality also of where AI actually fits into your advice process, it’s still a tool, and the tech stack is still something that has to be considered. And I think we’re kind of realising that now.”

Speaking on IMAP’s Independent Thought podcast series, Marin Wealth managing director Pedro Marin Ramirez suggested that the use of AI, coupled with incoming regulatory changes, could see advisers able to service up to 250 clients each.

However, referring to this, Worn questioned whether that is something that advisers even want to achieve.

Despite being wary of the sensationalism around AI, Worn said there are still opportunities to be had for advice firms willing to put in the time to properly integrate the technology.

“It’s not all bad, though. There has absolutely been some injection of AI features into a lot of products that people use every day that have been really cool and really useful,” he said.

“I think how we think AI is going to work and how it actually works is still a long way to go. And what I would say is that we’re still yet to see organisations, both big and small, really adopt AI thoughtfully and well.”