Mixed Opinions Among UK Financial Advisers on the Role of AI in the Sector

A recent study by CoreData involving 267 UK financial advisers has revealed a spectrum of opinions on the impact of artificial intelligence (AI) in the financial advice sector. Notably, approximately 32% of advisers believe that AI has the potential to revolutionize the industry, with this sentiment increasing to 40% among advisers focusing on high-net-worth (HNW) clients. The study identified several perceived benefits of AI in financial advising, including 45% of advisers seeing it as a tool to enhance client service efficiency, and 31% believing it could lead to reduced advice fees.

Interestingly, 10% of advisers think AI could play a role in reducing financial mis-selling. However, a substantial portion of advisers, 31%, caution that firms not adopting AI might face competitive disadvantages. Advisers catering to wealthier clients appear more optimistic about AI, with 59% acknowledging its efficiency benefits and 47% viewing non-adoption as a competitive risk. Additionally, 43% of HNW advisers report that their firms actively seek to harness AI technology.

The survey also sheds light on a broader focus on technology in advising, with 39% of respondents agreeing that significant investment in advice technology is necessary for relevance, especially in light of new regulations such as the FCA’s Consumer Duty, expected to drive technological advancements.

Despite these positive outlooks, advisers express concerns regarding AI. Over 42% worry about potential risks related to client confidentiality and data protection, and 35% express distrust in AI-generated information. Mass-market advisers, in particular, harbor concerns about confidentiality and data protection issues. Moreover, the prospect of AI replacing human advisers is a worry for 19% of respondents, rising to 26% among mass-market advisers.

Rory Wilson, Managing Director, UK and US, CoreData, commented on the findings, stating, “While advisers harbor concerns about AI, they also recognize its potential to positively transform the industry.” Wilson emphasized that AI offers numerous opportunities for advice firms, including automating tasks, managing data, assessing risk, and complying with regulations. These advancements could potentially allow advisers to allocate more time to clients and utilize essential soft skills, such as empathy and reassurance, which cannot be replicated by technology.

By fLEXI tEAM