One of the most dominant discussions happening in the financial advice profession is around artificial intelligence, with firms both big and small integrating AI tools within their practices, often aimed at creating efficiency gains and helping scale their business.
Explaining how that has worked at Shadforth Financial Group, chief executive Terry Dillon told the ifa Show podcast that these tools have been essential for expansion.
“We have a really clear business plan to double the size of the business over the next four and a half years,” he said.
“That means going from servicing around 10,000 families to 20,000 families. We’re not going to do that by just working harder. We’re going to need to really embrace technology and obviously AI.”
According to MLC Expand CEO Liz McCarthy, also speaking on the ifa Show, this means automating repetitive, “boring work that needs to get done to earn your money”.
The obvious benefit of this is that it can save advisers time, allowing them to get in front of clients and doing what they do best. By extension, this time in front of advisers can help enhance financial literacy among clients.
“AI is going to have to do a big load of heavy lifting to get people where they need to be, to get their financial literacy where it needs to be,” said McCarthy.
“I think that’s probably where AI may play a much greater role. It will help members think through some of the things that they need to get through, then bring the rules and the regulations to play and I think it’ll work well [in educating clients].”
Dillon agreed: “I think that’s a great example of where there is no commercial model at the moment for being able to educate large amounts of people about their finances, whether it be their super balance, and AI could do that.
“For a very low cost, you could help raise everyone’s financial literacy.”
Currently in the market, while older generations of clients have solid financial literacy, the largely untapped Gen Z demographic lacks much of the necessary knowledge required to responsibly manage their finances.
According to some research, this leads to low levels of confidence, poor understanding of the required savings needed for retirement, and overall pessimistic attitudes towards saving.
Not only can AI create programs that deliver financial education for clients, but the potential efficiency gains means advisers can be in front of clients more, lower fees and crack demographics that could benefit from financial literacy education.
You can catch the full episode with Terry Dillon and Liz McCarthy here.
