According to the latest findings from the Financial Planning Standards Board (FPSB), four in five (82 per cent) Australian financial advisers have or are planning to introduce AI into their businesses in the next 12 months, compared with 64 per cent of advisers globally.
Notably, the research found that, globally, small businesses with between two and 10 advisers were the most likely to be using AI with around half already utilising the technology and a further quarter either actively piloting or planning to introduce AI into their business in the next year.
Australian advisers are primarily utilising this technology for client-facing aspects, including communication and engagement (29 per cent), as well as collecting client information (22 per cent), while a much smaller segment of the cohort is using AI for market analysis and investment (6 per cent).
Looking at what they expect to achieve by employing AI, 50 per cent of Australian advisers believe that AI will enhance the quality of financial advice and nearly two-thirds believe it will reduce the cost of providing advice (64 per cent) and increase access to advice for underserved populations (62 per cent).
The report found similar results globally, with 78 per cent, 59 per cent, and 60 per cent, respectively.
While the benefits, it would seem, are primarily focused on the clients, the report found that the decision to implement AI into advice businesses was largely driven by internal demand (61 per cent), followed then by industry (52 per cent) and client demand (47 per cent).
Speaking on the findings, Financial Advice Association Australia chief executive Sarah Abood suggested that Australian advisers are turning to AI as part of their efforts to bring down the cost of service and improve accessibility.
“One of the clearest messages we hear from our members is that overly complex regulation, while well meaning, has driven many advisers out of the profession, making financial advice more expensive and harder to access,” Abood said.
“We need to cut unnecessary red tape and ensure that advisers can focus on delivering great outcomes for their clients. The research shows that a number of practices see AI as a useful tool in helping them achieve this.
“AI has risks, but it also offers real and immediate potential to help manage some of the complex regulatory and administrative burden advisers are faced with.”
Although advisers believe there is opportunity for them in AI, 52 per cent still raised concerns about data privacy and cyber security and a further 32 per cent noted potential issues regarding the accuracy and reliability of AI outputs.
Despite these concerns, only 39 per cent of Australian advisers said their business had a policy or provided guidance on the use of AI. Looking on a global scale, less than a third (28 per cent) reported having some general rules on the use of this technology and just 17 per cent had a comprehensive policy in place.
Financial Planning Standards Board chief executive Dante De Gori said that as advisers come to recognise the benefits of AI, the technology is now “paving the way” for more affordable advice.
“This technology is not just reshaping the practice of financial planning but may also open doors for those who have historically lacked access to critical financial services,” De Gori said.
“We are witnessing a pivotal moment in the financial planning profession as financial planners embrace AI to work smarter, allowing more time to engage in deeper human connection with clients such as navigating difficult conversations that impact financial decision making and providing clarity and support to stay on track to achieve their life goals.”
