Andrew Zietara, product director at Bravura Solutions, said artificial intelligence will be as transformative as the Internet.
Zietara discussed his “extreme optimism” about AI in an interview with FT Adviser, explaining how AI is being adopted in Australia’s advice sector and how it could transform advice in the UK.
Zietara said there are two main areas where the Australian consulting industry is implementing AI, including content creation and support processes.
He said: “As in the UK, there are quite a few outsourced paraplanning businesses in Australia that are already using AI models to generate advice documents and letters to clients from a fairly concise background.
“AI is also used to record client meetings, which can be uploaded to an AI model, which returns a summary and creates recorded document notes that would otherwise be spent by the advisor summarizing.”
Zietara noted that the current role of AI is focused on the support and ancillary processes that generate recommendations, rather than on the core recommendations themselves.
He said: “There is good precedent in the medical field where AI models read MRI and CAT scans, not for reliable diagnosis, but as another input and checkpoint for doctors to use.
“This will be the next iteration of artificial intelligence, which can help generate recommendations but is not ready to be the sole source.”
Zietara says that if AI is to reach its true potential, it needs to transcend some of its limitations.
“For example, AI in its current form does not really enhance core planning in any substantial way, and, crucially, it can still make mistakes that can cause serious problems in heavily regulated markets,” he added.
Regulation and artificial intelligence
Zietara believes that developing effective regulation is key to unlocking future innovation and encouraging widespread adoption of AI, particularly when it comes to advice.
“Under Australian law, you must be able to reverse engineer your processes to clearly demonstrate how you arrived at a particular answer when providing numerical advice,” he said.
“The problem with AI is that, by its very nature, it is a closed system that learns on its own, so there is no obvious audit trail to show regulators.
“This is a key regulatory issue we must address if AI is to expand its use, scope and scale.”
Zietara noted that in Australia, regulators are considering a sandbox approach that would allow companies to innovate outside regulation in a controlled way, but said this was still “early days”.
Digital advice
Zietara believes AI “definitely has a future” in digital advice and could be very beneficial in addressing issues such as the advice gap in the UK and Australia.
“AI will play a very active role in digital advice in the future, including customer engagement and asking clarifying questions in a natural, conversational way. AI is better at handling ambiguity than traditional algorithms, so there is definitely room for it to add more benefits to savers. Much value,” he added.
He also said there was “no doubt” that AI would do more than provide additional support services in financial services, but a key element of this would need to be recognized by regulators.
“I believe regulation ultimately needs to keep up with the speed of innovation, which is what has happened historically, particularly in digital advice.
“As it stands, AI is limited to support services such as help desk inquiries and processes for generating advice, but I believe the financial services sector is definitely ready to embrace AI in 2024 and beyond,” he said.
Consultant efficiency
Zietara believes UK advisers should fully embrace AI as ultimately it will make them “more efficient”.
He said: “The advisory experience in 2024 is still quite inefficient and there is significant room for improvement, for example in terms of data collection and new client onboarding, both of which can be very time-consuming.
“AI models can radically improve speed in many areas, and I think advisors everywhere should embrace this.”
Zietara also explained that from a purely business perspective, AI can help reduce the cost of providing advice while increasing the ability to provide advice.
He also believes AI can improve advisors’ creativity by writing in a specific style, allowing advisors to tailor content to their audience faster and easier, especially if they know clients prefer a certain method of communication.
However Zitala warns: “It’s important to remember that AI is not infallible, so advisors do need to check everything. The responsibility lies with the advisor, regardless of who writes or generates the content.
“This is a very exciting time, but we need to proceed with caution to ensure we create the right conditions, regulation and industry collaboration to deliver the full benefits of AI to advisors and the wealth management industry as a whole.”
alina.khan@ft.com