The AI gap: Clients and financial advisors differ over artificial intelligence

Financial advisors may be ready to embrace AI, but their clients are still keeping their distance.

That’s the picture painted by recent research, which shows a significant gap between wealth managers’ and investors’ attitudes toward artificial intelligence. Among advisors, optimism is widespread: 87% of planners expect AI to have a positive impact on their industry, according to Arizent’s “2024 Predictions” study.

But among clients, fewer people are convinced. A study by the CFP Board found that only 37% of U.S. adults would trust financial advice from a generative AI tool. And according to a poll by CNBC, 58% of Americans are “not interested at all” in using AI to manage their money.

Taken together, these surveys reveal a stark split-screen in attitudes: on the client side, deep distrust; on the advisor side, enthusiasm.

“In my practice, AI is a game-changer, enhancing both my work and the overall client experience,” said Julia Lilly, founder of Ryerson Financial in Houston, Texas.

Why are average investors so much more skeptical? Some wealth managers point to a link, in many consumers’ minds, between technology and scams.

“I think the wariness is because of all the abuse via computers — scams, frauds, phishing,” said John Power, principal of Power Plans in Walpole, Massachusetts. “Consumers are rightfully wary and won’t want to entrust private financial information to a computer-generated source.”

Other research appears to confirm this. A J.D. Power survey of U.S. bank customers found that 84% believed using AI in financial services would put them “at greater risk” of fraud or security breaches.

It’s worth noting, however, that the use of AI in wealth management doesn’t necessarily mean bots designing portfolios. There are many other uses for the technology that don’t directly affect investments, from transcribing meetings to writing marketing materials — and some planners say that’s all it should do.

“No one wants AI to manage their money,” said Robin Hovis, a financial advisor at LPL Financial in ​​Millersburg, Ohio. “Financial advisors do not view AI’s role as managing anyone’s money, but as being a tool in helping analysts and other investment professionals analyze and evaluate the enormous volumes of data. … AI can be a wonderful servant, or a terrible master, depending on how we use it.”

Arizent’s study found that 81% of advisors said they would use AI to support their business in 2024. But not all said they’d use it for investment strategies — 49% said they’d use it to improve emails and marketing, 35% said they’d use it for client onboarding and 27% said they’d use it for lead generation, among other uses.

“Using an AI notetaker has allowed me to be more present in client meetings,” Lilly said. “The tool gives me confidence that all the details of our discussion will be captured and transcribed for review after the meeting if needed.”

READ MORE: Exclusive research: Finance adapts to an unstable world

Crystal McKeon, chief compliance officer at TSA Wealth Management in Houston, uses AI to spruce up emails and marketing content.

“Artificial intelligence is advancing dramatically and can do some amazing things in just the few applications I’ve seen,” McKeon said. “I am not sure at what point we will be willing to put more faith in AI to take over a more material role in our organization, but AI is always evolving and I have no doubt it will result in increases in efficiency as it has in so many industries.”

As for AI’s role in actual investment decisions, research shows investors sometimes do trust it — if an advisor checks its work. 

In the CFP Board’s study, only 31% of respondents said they’d be comfortable taking an AI tool’s financial advice — but that number rose to 52% if a financial advisor verified the advice. Similarly, 34% were comfortable taking advice from an AI-based financial services platform, but 58% were comfortable if an advisor OK’d it.

For wealth managers, this data means two things: First, it signals that advisors have some ability to shrink the gap between their own faith in AI and their clients’. And second, even if the client already trusts AI, there is still a significant role for advisors to play alongside the bots.

READ MORE: Is AI coming for wealth managers’ jobs? Not yet, research shows

“The human advisor can devote more attention to client advising and interaction, building confidence and reinforcing the relationship,” Power said. “And we can do that with better information and better identifying of needs [from AI].”

For any wealth managers worried that AI may someday take their jobs, this could be reassuring news.

“That’s what professionals do,” Power said. “We use information and interpret that information to apply to a specific client’s case. AI just isn’t going to be doing that.”