Nuts & Bolts: Where Advisers Can Start With AI

As innovations enabled by artificial intelligence inundate the financial services industry, advisers may feel overwhelmed by the need to implement the technology—and feel confused about how to start.

Worries regarding costs, client data privacy and the bandwidth needed to learn new technology are common among retirement plan advisers, according to industry professionals. The risk of being left behind increases as AI continues to evolve and competitors increasingly use those tools.

But besides considering the high stakes of ignoring AI, advisers can also reflect on what they have to gain. DataDasher Inc. CEO Alexander Kearns claims financial advisers can save as many as 10 to 15 hours per week when AI is implemented in daily workflows with responsibilities such as pre-meeting briefs, follow-up communication and on-demand portfolio context.

Identify the Practice’s Needs

Whether advisers belong to a firm of two or 2,000 professionals, individuals can take control of how their practice implements the use of AI.

A good first step for advisers is to “identify what they want help with,” according to Mark Gilbert, co-founder and CEO of Zocks Communications Inc., an AI platform for financial services.

Another recommended first step is to learn what AI is, how it works and what the technology can do. Lenox Advisors Inc. President Greg Large says parent company NFP Corp. and partner company MassMutual provide his team with introductory and in-depth courses and trainings on AI.

“Fear of the unknown is the greatest obstacle to change,” Large says.

Gilbert says public domain chatbots like ChatGPT are a free, convenient way to start using AI and figure out how it can help with general administration. But if advisers want help with industry-specific tasks, they should turn to AI tools “purpose-built for regulated financial workflows,” according to Kearns. Speaking on November 17 at the Investments and Wealth Institute Strategy Forum in New York, Kearns told a packed room of wealth management professionals that there is a tool for almost any adviser task. They include personal assistance tools like Google Gemini or Microsoft’s Copilot, workflow automation tools like DataDasher and Zapier, marketing and client communications tools like Bento Engine or FMG Suite, and tools for portfolio risk and reporting like FactSet and Nitrogen.

Zocks’ newest product, Document Intelligence, released in collaboration with eMoney on December 2, automatically extracts client data from financial documents and syncs it directly into eMoney, a wealth management and financial planning software. The product was developed to assist with the client onboarding process, which typically has heavy documentation.

“[Before] AI, someone would fill out 200 to 300 data points in eMoney by reading these documents and typing right in it. As you’d imagine, it takes hours, and it’s probably not the most fun thing,” Gilbert says. “Now we can just take the documents, click the button and go [get] plans … back to clients or prospects.”

The Danger Zones

Besides learning AI’s capabilities, advisers also need to know its danger zones. Public chatbots like ChatGPT can see and store users’ data, so advisers should not give chatbots confidential data, Gilbert says.

Critical compliance topics Kearns recommended include learning where data live: Advisers should know if the AI tool’s server is U.S.-based, who has access to stored data and whether data facilities are shared with other companies. Knowing where digital data lives is essential, Gilbert says, because every business uses software, and cloud storage for that data software is at risk of a security breach.

Kearns says businesses also need to know whether their AI data is being used to train AI models that other companies can access, stressing the importance of data isolation.

In each use case, humans need to verify all AI models’ outputs. Kearns says research cited by AI must be verified, analysis needs review, communications must be edited and assigned tasks need to be tracked and monitored. AI models also need to document every step of their processes for the sake of human reviewers and in anticipation of future audits.

Training the Next Generation

Ricky Illigasch, eMoney’s vice president of product management, wrote in an email that his company learned last year that 70% of surveyed advisers saw AI as a tool to help support their decision making, and 72% valued AI’s ability to analyze vast amounts of financial data.

“Ultimately, this technology will help advisers deliver more valuable and insightful advice,” he wrote.

Large says that Lenox Advisors provides an AI succession planning tool for its own older advisers, designed to help coordinate succession plans, assist with acquisitions and help the next generation transition into leadership roles. The firm is currently working on an internal bot that would be part of the succession planning tool and would, Large says, allow newer advisers to ask questions about practices based on internal information.

Similarly, as advisers from older generations retire and transfer their clients, the AI tool will assist younger advisers in learning about those clients and will provide insights to help those advisers grow and build their own practices, according to Large. That way, knowledge of past and present practices can help shape the company’s future and be useful for future advisers as well.