Could AI increase advisers’ capacity to 250 clients each?

Speaking on IMAP’s Independent Thought podcast series, Marin Wealth managing director Pedro Marin Ramirez explained how his firm is currently using artificial intelligence (AI) to assist in writing proposals, letters of engagement and file notes, reducing the administrative burden and freeing up advisers’ time.

“We are able, instead of what used to take me probably 45 minutes to write an actual file note, it takes around maybe two to three minutes. So, the efficiencies are there,” Ramirez said.

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When it comes to using AI in the financial advice industry, there are certainly some risks, largely in consideration to the highly sensitive nature of the information of which advisers are privy to, leading some licensees to take a more hesitant approach to AI.

However, Ramirez said that being self-licensed has allowed his business to take on the risk component of using AI, providing the opportunity to dictate the use of this technology as seen fit for the business.

“One of the inefficiencies is the fact that the licensing system, it’s based on how much risk the licence is willing to take. And because AI moves so fast, we don’t know a whole bunch of things [about] it, some licensees will not touch that,” he said.

“And I do have to disagree with that to a degree, because they’re worried about sensitive data. But what is sensitive data? Your religion, your health, your address, your mobile phone?

“There’s probably some sensitive data that would never be in a file note. The file note is more about strategy … Even if we send out an engagement proposal, it’s very general.”

Ramirez suggested that if current proposed legislation was to be passed that would see the removal of statements of advice to be replaced by letters of engagement and records of advice (ROAs), coupled with the use of AI, advisers would be able to increase their client capacity considerably.

“I think technology will help us massively scale up. So, I would consider 200–250 clients per adviser will be the norm because of how easy it would be for us to trade, how easy it will be for us to engage,” he said.

“Because, if you have a database of strategies, which could be endless, you can just tell AI, ‘Hey, this is the strategy I’m thinking. This is the amount. This is the research that backs it up. I just need you to write it. I need you to write that ROA’.”

He explained that this method would see advisers still completing the relevant research for the documents while relieving them of the need to actually write and edit said documents, saving them several hours per client.

“I think, five years from now will be a completely different scenario from the absorption of AI,” Ramirez said.

While recognising the potential of AI to enhance advisers’ processes, Liberal MP Bert van Manen noted the need for greater regulatory clarity in order for the industry to reap the full benefits of incoming technology.

“I think there are some tremendous opportunities Pedro has just touched on with AI, but if we make the regulatory environment clearer and more transparent, the opportunity to use AI becomes even more relevant,” van Manen said.

Though, he also reminded advisers of the importance of maintaining the personal aspects of their client interactions.

“At the end of the day, we can use all of the technology we like in the world, but I still think it comes down to a personal relationship with a client, and we should never, ever dismiss the value of that,” van Manen said.

“That personal relationship, AI will never replace that, because when you’re sitting across the table from somebody, and you can see their facial expression or their tone of speech, and you have a discussion, you can pick things up in that that may lead to you asking a question that they hadn’t even thought about themselves.

“That’s the value of the personal relationship.”