The world of generative artificial intelligence (AI) is moving at a frenetic pace, with Australians using tools like ChatGPT for everything from writing songs to solving complex dilemmas.
Businesses are increasingly drawing on the conversational chatbots for a variety of tasks, including analysing trends and data, keeping in touch with their client base, checking for fraud, writing code, planning and double-checking external communications and administration.
It prompts several questions: Could AI help solve the advice affordability problem? Should advisers be worried about the future of their roles? Or can advisers use AI to improve efficiency, reduce costs and ultimately boost profitability? Adviser Ratings has taken a look.
AI, accessibility and the role of human advisers
With fewer than 16,000 advisers to help plan the financial futures of millions of Australians, regulators have long debated how digital advice could be used to plug the gap.
Recently, Assistant Treasurer Stephen Jones gave the green light to super funds to provide simplified financial advice to their members, but stopped short of giving banks and insurers the same privileges.
But what about using generative AI?
We’re already seeing machine learning tools being used for more straightforward financial requests – such as simple budgeting – which usually fall within the realm of general advice. AI algorithms have also been used to create model investment portfolios, which are rebalanced based on new inputs.
When it comes to more complex and personalised advice, Adviser Ratings doesn’t expect human advisers to be replaced any time soon. We know from our research that clients place a lot of value on the conversations they have with their advisers.
As one academic points out, current generative AI still lacks the language nuances to communicate like a human would, which might affect the trust the client would place in the AI tool and its authority. Similarly, there are concerns about privacy and security and the mechanisms AI tools use to make their decisions, which at this stage, aren’t completely transparent.
Having said that, we expect advisers to increasingly integrate AI into the background of their advice processes.
How advisers can use AI
Given conversational chatbots are still new and evolving, we are yet to see their widespread use across the advice sector. However, we think that could change in the coming years. Here are some of the ways we expect AI to help advice businesses early on:
-Connecting with clients and potential clients via AI-generated social media posts.
-Quickly analysing trends in local and global investment markets.
-Assistance with scheduling, customer service and frequently asked questions.
-Help with producing reports for clients showing past performance.
Ultimately, every business must decide if and how it will embrace AI to guide its processes. We’ll be watching closely.
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