Three reasons you might consider using AI in your retirement practice
The use of artificial intelligence (AI) has skyrocketed this year and will likely become mainstream—even in our relationship-based industry. Eighty-three percent of surveyed advisors believe that AI will have a direct, measurable, and consistent impact on the client-advisor relationship in the next few years. Let's explore how one branch of AI—machine learning—could help you transform your practice and key considerations should you decide to use it.
What’s machine learning AI?
Machine learning AI uses algorithms trained on data sets to create models. These models are used to complete certain tasks such as analyzing data, classifying information, or suggesting products based on past behavior—think of the recommendations you get when you’re shopping online or using a streaming service, for example. Generative AI, on the other hand, is used to create content, and it’s beyond the scope of this article.
How AI may help you grow your practice and deepen relationships
Simply put, machine learning AI is a practice management tool that may help you increase efficiency and have more consultative client conversations. Within a matter of minutes, it can process a significant volume of data to help you:
1 Qualify leads
Based on your target market and other parameters, AI can scour publicly available information to find prospective clients that fit your criteria—saving you time and effort. Over 9 out of 10 advisors believe AI can help grow their book of business organically by more than 20%.¹
2 Identify at-risk clients
You can use machine learning AI to create a list of clients you haven't heard from or have expressed specific concerns about their plan. This information can help you take preventive action to preserve the relationship. Over one in five advisors believe AI can help them segment clients to further understand acquisition, growth, and retention goals.¹
3 Offer more personalized recommendations
AI can provide in-depth insight about existing and prospective clients to help you prep for meetings. For example, you might use AI to:
- Search for news about the client's business, such as a merger or acquisition
- Extract data from your reporting tools
- Examine behaviors, such as website visits and online activities
All three can help you tailor your advice to your clients' specific needs. Additionally, many advisors believe that AI can help identify proactive cross-selling opportunities.¹
Key considerations for using machine learning AI
Before doing anything with AI, be sure to check with your home office and compliance team first. Many firms have created AI governance and risk management frameworks, and it’s essential that you comply with these policies and procedures, which may cover:
- Approved uses for AI
- Protecting confidential data
- Cybersecurity protocols
- Record retention
- Required training
Why AI? The potential for more human interaction—not less
As a financial professional, you want to spend your time helping clients, not looking for them or dealing with administrative tasks. With the appropriate safeguards, machine learning AI has the potential to help you minimize the time you spend on administrative tasks so you can spend more time on the person-to-person tasks that demonstrate your value and help you build your practice.
1 “AI in wealth management: A financial advisor study,” Accenture, 2022.
Important disclosures
The commentary in this publication is for general information only and should not be considered legal, financial, or tax advice to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.