The Impact of AI on the Financial Planning Industry: A Potential game changer for the UK…

The Impact of AI on the Financial Planning Industry: A potential game changer for the UK

It was, of course, extremely tempting to let chat GPT write this blog. However, as with most experiences of AI right now, when I tried it, though there were lots of useful points from the computer, it still needed me to add the human touch.

This is obviously subjective. In my view, the computer provided a comprehensive overview of how AI can change the game, but it was boring and generic.

So the below is combination of ChatGPT and me. I guess we should get used to that.

Artificial Intelligence (AI) is no longer just a buzzword—it’s changing the way industries operate, and financial planning is no exception. From improving decision-making to making investment strategies smarter and more personalised, AI is revolutionising how financial planners serve their clients. For those of us in the UK, this shift is already happening, and the benefits are huge.

AI’s Role in Financial Planning: The Basics

At its core, AI in in financial planning is about using technology to make processes more efficient, accurate, and client-centric. It’s also very much about time savings /making more of an adviser’s time. AI can handle tasks that used to take hours, freeing up financial planners to focus on what truly matters—understanding their clients’ unique financial goals and offering tailored advice.

Initial time savers

For financial planners, note taking has always been essential. Historically looking back through your notepad to remember what clients said, to use their own words, to remember the soft facts. We’ve had second advisers join meetings and/or specific note takers come in but now, with AI, you get a beautiful summary of the key points, the goals, the data, all emailed to you within 5 minutes of the meeting ending. Then you can upload this straight to your CRM for the client file. This leaves the second joiner free to do other work and provides an easy reference for future.

Post meeting notes.

For now, the above use of AI has been the biggest time saver. However, coming down the track is developing those meeting notes to form part of a suitability report.

So, your AI tool will provide the notes from an annual review meeting – this will then provide the basis of a full suitability report. As with most things, it will definitely need your paraplanner to run through, add in calculations and costs etc. However, if it could produce even 75% of the suitability report, that would be a huge time save. We’re actively working on this process now as, for us during our crazy surge period, this could be the game changer I refer to above. 

Robo-Advisors: A New Wave of Accessibility

While robo-advisors - automated platforms that use AI to manage investments—have been around for a while, their technology is evolving rapidly. With AI continuously learning and adapting, these platforms are starting to offer more sophisticated, personalised investment strategies. Robo-advisors can be a great solution for clients who may not need or can't afford traditional human advisors.

I believe this has the potential to be a great solution to the ‘advice gap’ - for the people who need advice most but are typically priced out of using a skilled adviser. Technology is currently building for portfolios which is great, but adding digital advice as an overlay will be the next generation of digital wealth management and will hopefully provide long term investment solutions to the mass market.

The Challenges to Consider

While AI is making waves in financial planning, it’s not without its challenges. Data privacy and security are top concerns, as clients' sensitive financial information is at risk of being compromised. AI systems must adhere to strict security measures, especially given the UK’s data protection laws. As a business owner, we need to scrutinise who we’re doing business with and where is this data being held. We have comprehensive cyber security protection and insurance, but we want to be pro-active here and make our business as cyber secure as we can.

We also provide regular training to the staff in this area, as well as communication to clients around navigating cyber security risks.

Another primary challenge is ensuring that the human touch isn’t lost in the process. While AI can analyse data and make predictions, it’s still important for financial planners to offer the personal advice and empathy that clients need when making significant financial decisions. I believe the best financial planning solutions will combine the technology of AI with the expertise and empathy of expert human advisors.

Finally, there’s the issue of ethical considerations. AI models are only as good as the data they’re trained on, and if that data contains biases, the recommendations made by AI systems could be flawed. We must ensure that any AI systems used are transparent, fair, and free from bias to guarantee that clients get the best possible advice.

The Future of AI in Financial Planning: What’s Next?

The future of AI in the UK financial planning industry is bright. As technology continues to evolve, we can expect even more advanced AI tools that offer deeper insights, better predictions, and more personalised services. For us, embracing AI will be key to staying competitive and delivering the best possible service to clients which is one of our core values.

Embracing AI is no longer a choice—it’s now a necessity.