In fact, AI assistants have even started providing financial advice, otherwise known as robo-advice.
AI are computers or algorithms that are designed to think like humans. Robo-advisers are usually hosted in apps or web-based platforms and use AI to provide tailored financial advice to humans.
The robo-adviser may ask questions about your goals, financial circumstances and appetite for risk via an online survey, then make recommendations (or automatically invest) based on your feedback. A good robo-adviser should also be able to help you manage your portfolio in future, provide custom alerts and adjust your portfolio automatically.
Robo-advice is growing rapidly:
Robo-advice may sound like something out of a sci-fi movie, but it’s already hugely popular all over the world and it’s growing fast.
In fact, Skyquest, an AI and technology consultancy, estimates that the global market for robo-advisers will grow from $8.5 billion NZD to $68 billion by 2030.
New Zealand is a little behind on this front, but we're getting there:
And as technology advances and becomes more mainstream, we’re likely to see AI become more and more commonplace in the financial industry.
Robo-advice may be on the rise, but human financial advisers aren’t going anywhere soon. In its current form the technology behind AI has its limitations and there are several questions around security and accuracy.
AI advisers also can’t behave proactively, they can simply act within set parameters. Human advisers on the other hand, can understand the human behind the numbers, get to the root of their challenges and come up with tailored solutions based on their understanding of the individual (instead of a cookie cutter suggestion, based on an algorithm).
With all that in mind, AI is more likely to play a supporting role - allowing financial advisers to automate repetitive tasks so that they can spend more time providing value-added services and speaking with their clients. It may help provide free, open access to advice when customers are making straight forward financial decisions, like choosing a Kiwisaver fund.
Even when technology advances, there’ll always be a place for real humans. After all, there’s nothing quite like picking up the phone and talking to a human.
Read more about finding a financial adviser here.
Disclaimer:
This ‘Is AI taking over financial advice’ blog is general information only. The views and opinions expressed do not necessarily reflect those of the FSC. It is not intended to constitute legal or financial advice and does not take your individual circumstances and financial situation into account. We encourage you to seek assistance from a trusted registered financial adviser, legal or other professional advice.
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April 2024.