Impact of Artificial Intelligence (AI) in Financial Advisory Industry

Participants in the program gained practical guidance on how AI can be used to improve client services, how predictive analytic technology can advance client interactions with advisors, and the U.S. Securities and Exchange Commission (SEC)’s proposed rule on predictive data analytics.

Our panelists explored the transformative impact of artificial intelligence (AI) on the financial advisory industry. In an era marked by technological advancement, financial advisors are presented with both unprecedented opportunities and notable challenges. Financial technology is increasingly being used to help mediate the advisory relationship, providing seamless ways to match with financial advisors, communicate more effectively, and increase client engagement opportunities.

As AI tools have become increasingly available, integrating these techniques into advisory relationships has been on the rise within broker-dealers and registered investment advisors. The SEC proposed a new rule in August 2023 that highlights where regulators see an increased risk of conflicts of interest that may not be in the best interest of clients. The proposed rule outlines the SEC’s potential approach to addressing these risks when predictive data analytics are used in client interactions (for proposed rule, click here).

The panelists also explored the following topics:

• Use cases for how AI can enable advisors to make informed decisions and provide timely advice and services to clients.  
• How predictive analytic technology and AI-enabled services can provide tools to clients to self-manage their own financial decisions and strategies.
• Governance practices that companies can consider to manage potential negative impact to clients.
• The SEC’s proposed rule on predictive data analytics and the regulatory perspective on the risks created by these technologies.
• The potential implications of AI on advisor/client interactions, and the industry.