How Advisors Can Differentiate Themselves From Generative AI Advice

Applications enabled with generative artificial intelligence capabilities may soon become the leading source of retail investment advice. Deloitte forecasts usage shooting up from about 10% in 2024 to 78% by 2028.

This might seem like a scary number for financial professionals, but Deloitte notes that investors’ usage of financial advisors will only drop by about 4%.

In other words, generative AI won’t replace financial advisors altogether. But it may replace “limited scope” advisors—those who only give investment or transactional advice.

That means that to stay relevant, advisors should ensure that they offer more than this limited scope and include holistic, comprehensive advice.

The term more carries a lot of weight here and may not be too helpful on its own. In our research, we defined this term by asking investors what they value in a financial advisor using different measurement strategies.

What we found is good news for advisors. It turns out that much of what investors value in a financial advisor still cannot be fully replicated by generative AI.

In the diagram below, we illustrate what this looks like.

• First, we asked clients what themes they value in an advisor. In the first column, we map out the four broad themes that we heard most frequently.
• The next column explains how gen AI, in its current state, can manage needs related to these themes.
• The final column shows how advisors can build on the outputs of gen AI, and the value they can provide by incorporating the human element of financial advising.

Wrapping Up

Although generative AI has immense potential in the financial advice sphere, our research indicates that investors greatly value the soft skills that a good financial advisor can bring to the table. Generative AI does a great job of spitting out answers, but it still can’t replicate the social connection inherent in good advisor-client relationships and the quality of advice that can result.

To differentiate themselves from generative AI applications, advisors should consider devoting more time to building a strong relationship with clients—and maybe even using gen AI to free up more time to spend with clients.