How advisors can use technology to provide advice at all times

Robots don’t get tired. They don’t get annoyed with clients. They can operate at all hours of the day, including weekends and holidays. Does that qualify them to offer financial advice?
Well, no. But agentic artificial intelligence (AI), a kind of next-level chatbot, was among the topics discussed on Tuesday at the Federation of Independent Dealers’ (FID) annual conference in Toronto. A regulatory panel was asked about these agents and how they could be used in financial services.
Naturally, the technology comes with potential problems, including who is responsible for an autonomous agent and the advice it gives, and how ethics are programmed into it. AI tools have been known to generate incorrect or misleading information, often based on flawed or unstructured data. There’s also cybersecurity risk: a bad actor who gains access to the data can mess with the output. And, of course, there’s the issue of whose job the agent replaces.
With those limitations in mind, though, the panellists saw big opportunities for AI as a tool for advisors. Parameters can be built into the agents, limiting the type of questions they’re able to answer and leaving room for a human element. As with most discussions about AI, this one turned to the case for a time-saving partnership between advisors and technology.
One potential benefit is personalization at scale that would allow more people to access financial advice. Kendra Thompson, founder of financial services consulting firm Epok Advice, said that type of personalization from technology has proven elusive thus far. That’s partly why years of the “sky-is-falling rhetoric” around robo-advice hasn’t been borne out. Most people still want human advice at some point.
“The need for advice is not going down at all,” she said in a keynote address at the FID event. “You don’t meet a next-generation investor who needs less advice. When they opt out of advice, it’s usually because they’re struggling to understand how to consume it on their terms.”
That’s challenging the traditional idea of “dedicated, multi-decade, pay-all-the-time advice,” she said, and the industry needs to figure out how to replace it.
Advisors often focus on what they’re good at and what’s made them successful. That can mean committing time to the same 20 per cent of clients and speaking to them in more or less the same way, she said. Technology can help advisors see more and be more proactive with a broader client base.
When clients leave a firm, Ms. Thompson said, advisors often find out too late about a life event and the missed opportunity to provide relevant service around it.
She pointed to U.S. firms using “indicative personalization” tools that provide alerts to advisors based on client behaviour: a 60 per cent chance that a client is experiencing a career shift, for example, or a 40 per cent chance that a client is unsatisfied and thinking about moving their money – along with a nudge to reach out and address the potential problem.
Similarly, compliance departments may soon be able to use AI tools to help predict issues. And similarly, that’s unlikely to leave chief compliance officers jobless.
“We’re not just going to flick a switch tomorrow and leave compliance to AI systems,” said Nick Hawkins, senior policy advisor at the Ontario Securities Commission, who participated in the regulatory panel.
How are you using technology to offer more personalized advice or serve a broader client base? I’m interested: [email protected].
Growth mode: Many advisors want to offer a suite of services under one umbrella. But does that mean hiring new team members or partnering with external experts? Helen Burnett-Nichols breaks down the choice.
Quant funds: With advancements in artificial intelligence, machine learning and algorithms, some investors see an opportunity in quantitative funds’ systematic, mathematical approach. Others aren’t convinced yet. “For a lot of people, when you start talking math, their eyes glaze over,” says Bill DeRoche, head of quantitative investing at AGF Investments. Gillian Livingston reports on why asset managers need to educate investors about their offerings.
Remote work: As the public sector tightens rules on remote work, wealth management firms’ mandates are varied, with some advisors reporting to the office five days a week and others choosing their own schedule. Despite the variation, Daniel Reale-Chin writes, advisors say the way they conduct client meetings, run events and build relationships has changed.
Rating the cut: The Bank of Canada cut its policy interest rate by half a percentage point on Wednesday and said inflation has largely returned to normal.
The move didn’t surprise financial markets, and the odds point to a smaller 25-basis-point cut in December – even though some argue the central bank needs to loosen policy faster.
Meanwhile, Rob Carrick writes about what not to do now that rates are lower.
Embracing ETFs: With regulations requiring financial advisors to have more expertise on products they sell, Capital Group Canada launched its first suite of ETFs as it looks to expand its product shelf to serve advisors who want to work with fewer asset managers. Clare O’Hara reports.
Blame it on the rain: Despite this endless summer, fall is coming. So, what do the inevitably cold, dark and damp days ahead mean for investor sentiment? John Lorinc writes about gloomy weather and bearish sentiment.