'AI is not a silver bullet': Advisers warned against chasing the hype
Financial advisers should resist the urge to pursue flashy artificial intelligence (AI) use cases and instead focus on solving specific business problems, industry experts have warned.
Speaking at intelliflo’s Innovate conference today (9 June), panellists told firms to start with simple AI applications, accept that implementation takes time and avoid expecting instant transformation.
AdvisoryAI co-founder Alan Gumy said many firms risk approaching AI adoption from the wrong direction. He recommended going from a problem orientation instead.
“Think about the problems that you have within the firm, or rather the business objective, not the biggest hurdles.
“If, let’s say, a big hurdle is something that AI can do very well, then maybe you can go ahead and use it. If not, please don’t use it.”
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Gumy cautioned advisers against viewing AI as a ‘cure-all’ for operational inefficiencies.
“You can be so easily solution-driven when you’re trying to do anything with AI because it just sounds so amazing,” he said. “AI is not a silver bullet.”
Instead, he encouraged firms to begin with straightforward use cases such as meeting transcription before progressing to more sophisticated applications.
“Start small,” he said. “Meeting notes are a really easy way to start.”
However, he warned that firms expecting immediate productivity gains from more complex tasks, such as drafting suitability reports, could be disappointed.
“If it’s going to be a complex task and the vision is for AI to save a significant amount of time, you’ll also have to invest a significant amount of time to build something that can scale over the longer term,” he said.
“You won’t be able to discover and use it on day one and it’s just going to be magical.”
Sarah Watts, transformation director at Timothy James & Partners, echoed the need for realism.
She said firms often begin their AI journey believing the technology will seamlessly automate increasingly sophisticated advice processes, only to encounter the complexity of real-life cases.
“You kind of think, ‘Oh brilliant, nice and simple. This is going to be great’,” she said. “But then you get into life and multiple pension transfers and drawdown and all that lovely stuff.”
Watts said successful implementation depended on building confidence gradually and recognising that trust in the technology develops over time.
Despite these challenges, neither panellist suggested advisers should shy away from experimenting with the technology altogether.
Asked what advice he would give to firms yet to begin their AI journey, Gumy’s message was simple: “Give it a go. You can’t break it.”
