Financial advisors have been presented with great opportunities through AI, but they also face huge obligations to clients because of it, according to David Chubak, head of wealth management and field management for Edward Jones.
Advisors have access to large amounts of client information and to new tools, but they have to put a human face on the data, Chubak said in an interview prior to the release of an Edward Jones/Gallup survey, “Financial Fulfilment: Where Americans and Canadians Turn For Financial Guidance.”
The survey of 5,075 United States residents and 2,117 Canadians showed that a vast majority of people relied in part on their own internet research but that they had low rates of confidence in the results. Financial professionals scored high on the confidence scale.
“Advisor assistance and AI research are not in conflict with each other—they are used together by those seeking guidance,” Chubak said. “The two working together are going to improve financial advice for millions of clients over the next decade, but it is not an either or situation. They can be used together.”
Advisers will have an obligation to know their clients and know how they want to engage, he said.
Between the additional information that is available to investors, the large number of advisors who are retiring, and the growing number of people seeking advice, the advisors who remain are going to be very busy, he said.
Three-quarters of Americans and nearly seven in 10 Canadians have sought financial guidance from at least one source in the past year, according to the study.
Among U.S. adults who have sought guidance, 73% used their own internet research, more than any other source. Family members are cited next at 35%, followed by professional financial advisors at 32%. Eighteen percent have sought financial guidance from artificial intelligence tools.
Financial advisors in both the U.S. and Canada received the highest confidence ratings. Among all adults, 79% of Americans and 76% of Canadians have at least some confidence in the expertise of financial advisors, including roughly one-quarter in each country who have a great deal of confidence in them.
Despite the number who said they used AI, it ranks low on the confidence scale, the study said. Only about 30% in both countries have at least some confidence in AI as a source of financial guidance, and only 3% in the U.S. and 4% in Canada have a great deal of confidence.
Use of financial advisors also varies by age group. In the U.S. only 14% of Gen Z, ages 21 to 29, used financial advisors, compared to 55% of baby boomers. About one-quarter of Gen Z and millennials used AI tools compared to 7% of baby boomers. Doing their own internet research leads the choices for advice in all age groups.
“Investors are using a variety of sources for information, but when it comes to conversations that have real consequences they have more confidence in financial professionals,” Chubak said. “But advisors should realize people are becoming more comfortable with AI.”
Advisors should also rely on each other for best practices, he said. “They should focus on being mentors to each other,” Chubak said.