Artificial intelligence could be the key to making financial advice more human, rather than less, according to one tech firm.
Gary Abela is co-founder of Codepan which has been working in the field for 10 years and wants to bring AI solutions to advisers.
So far his team has visited around 50 UK-based firms to work out how the technology could help them day-to-day.
Naturally, some in the industry are fearful of the impact of AI on jobs, as well as how effective it would be to use.
But Abela thinks this fear is natural and could even be helpful.
He said: “Innovation doesn’t happen unless there is a need and for me that need in the advisory world is that assets under management are growing and the margins are declining. In our view AI is just a component part of the end solution.
“Financial advisers are spending 70 per cent of their time on irrelevant items and we need to get them speaking to customers more.
“We want to free up the humans that we have working in this industry.”
Could AI reduce the advice gap?
As well as speeding up processes, Abela sees other benefits to using AI technology in financial services.
This includes ensuring knowledge is not lost when advisers retire or leave a firm.
He added: “My personal objective is to reduce that advice gap in the population.
“Because it is currently so cost intensive to run a financial advice business, it is very hard to work with somebody who has a relatively small amount to invest.
“I think if you can streamline the process it will be possible to offer advice to the wider community.”
Abela, who previously worked in asset management, said rather than manually inputting data, AI can be used to fill in forms using documents provided by clients – though these would still need to be checked by members of staff.
Another way the co-founder thinks it could be used would be through a tool to transcribe adviser and client meetings and being able to ask the tool questions, such as what is the financial objective of this client?
Creating a ‘customer blueprint’
Abela thinks it could also help advice firms become “data driven companies” and create an electronic trail of clients which could make advisers more proactive in their approaches.
“Through this you would start to have a blueprint of what your customers are invested in," said Abela.
“If something happened in the market, a black swan event, you want to see which of your clients have been affected.
“It will enable you to look this up and see whether you can be proactive rather than reactive.”
And he does not think that rolling out AI in financial advice would lead to job losses, particularly in administration and paraplanning.
“There is definitely a bit of push back from the paraplanning teams, so we show them how there needs to be humans in this process.
“What it means is they will be able to focus on the more interesting parts of thier jobs and get away from the data inputting work.”
tara.o'connor@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com.
