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PFS Podcast: Using AI to save time, reduce cost and enhance customer experience

Publication date:

02 November 2023

Last updated:

18 December 2023

This month Scott Millar and Robert Schwarz, co-founders of Finova Money and members of the PFS Power Panel, talked about their experience of using ArtificiaI Intelligence (AI) in their financial planning firm.

SM: “Right now, there are three key areas where AI can be of particular help in financial planning. The first is time. On average, advisers only spend 40% of their time with clients. Using AI tools to streamline and automate processes means that we can spend more time on the stuff that genuinely matters, namely client relationships.

“The second is reducing cost. As a new business, overspending is one of the biggest risks we face. Using AI allows us to minimize some of our costs, while maximizing efficiency.”

RS: “A good example is a Virtual Assistant. We are currently looking at Microsoft Copilot (other Virtual Assistants are available) an AI tool which can record the adviser/client conversation, pull out the important parts, summarise the content and nail down action points so nothing is missed. This could be a gamechanger when it comes to client meetings.”

SM: “This brings us on to the third and most important part AI has to play: enhancing the client experience. Finance is an extremely emotive subject, so how do we enable a customer to more clearly visualize their financial future, and paint a picture of their hopes and plans?

RS: “We use a tool called Stable Doodle, which allows the client to literally sketch ideas to generate a visual representation of their plans.

“In fact, images are an increasingly important element in our communication, particularly as a new company with a younger audience. Pictures and video can be easier to understand and digest than words alone. Video-editing tools enhanced with AI can piece video content together not just for your social media use, but as part of your customer communications. We’re using a tool called Kapwing, which automatically adds subtitles to videos, cuts out the narrator’s ‘um’s and ‘ah’s, and makes the whole thing slicker and more professional at the touch of a button.”

AI limitations – and potential

SM: “When it comes to creativity, AI beats human endeavour every time it’s tested. But of course, all AI needs to be fed prompts, at least initially, so there is still an element of human bias implicit.

“In financial services, AI’s greatest limitation is perhaps the fact that it is entirely devoid of emotion. Financial planning is a very emotive area. Advisers need to be able to tap into the psychology of their clients, to truly understand their wants and goals. There is no AI tool which can do this – or at least not yet!”

RS: “So AI won’t be replacing financial planners or advisers any time soon. But it is likely to change the shape of the industry to an extent. At the moment, when you think about a typical financial planning firm, it looks like a pyramid, with a relatively small number of financial planners/advisers at the top. Underneath comes a larger layer made up of paraplanners. Then at bottom of the pyramid there are lots of administrators.

“In time, if AI is truly integrated, then that pyramid will become inverted, and role of the financial adviser becomes more that of a coach. The top layer of the inverted pyramid is the largest, consisting of financial professionals, who are able to go through the emotional journey with their clients. They are supported by a layer of paraplanners – fewer paraplanners than at present, but that role will still be very important delivering technical expertise. And underneath that layer will be the administrators, who will become like pilots, controlling the AI tools as needed.”

Get on board

SM: “These changes won’t happen overnight. But as financial professionals, we need to give serious consideration to anything than can enhance client outcomes. AI is at its most basic now, so it makes sense for all of us to get on board and start investigating what is available. Otherwise, we risk falling behind, as AI’s capability becomes ever more complex and sophisticated.”

To listen to the full PFS Radio podcast episode, follow this link.