Could AI Investment Advisors Replace Human Financial Planners?

AI and Investments

According to an Ontario Securities Commission study, revealed that nearly 29% of ChatGPT users have already turned to it for investment or finance-related guidance¹. Very soon, AI (Artificial Intelligence) has become a part of various sectors, including finance management. The question that may arise here is, will AI investment advisors replace human advisors?

To answer this question, you need to understand how AI has been evolving in this sector and what role it can play in the future. Let's discuss the scope of artificial intelligence in financial planning and how human advisors can adjust to this change.

What are AI Investment Advisors?

AI is transforming the way various industries are operating, and financial advisors are one of them. Artificial intelligence as investment advisors is a highly advanced analytical tool that can advise on financial management. AI tools can process huge data and present you with highly organised and practical investment options. That’s not all, it can also prepare personalised charts, investment plans, and explain how the market can benefit your investments.

One of the striking benefits of AI investment advisors is that these tools are very quick, efficient, well-streamlined, and personalised. For companies, it means reduced costs and faster insights. For individual investors, it often means accessible, low-cost entry into financial planning.

Did you know, today, more than nine out of ten financial services companies report integrating AI into some aspect of their operations?

Can Human Financial Planners Be Replaced?

Knowing about how AI has been shaping the modern financial advisors industry, it is only obvious to wonder if AI investment advisors will replace human advisors in the future. Let's understand more about it.

AI investment advisors, as discussed above, are advanced tools. They are very good at data analysis, as they can recognise patterns often invisible to the human eye. However, when it comes to adding the human touch to it and emotional intelligence, human advisors surely have an edge over AI.

They cannot detect hesitation in your voice. They cannot weigh the emotional comfort you might need when markets are volatile, or guide you through a financial decision in the broader context of your personal life.

So, will AI replace human advisors entirely? Well, that's quite unlikely. That's because the use case of either of the two also depends on the preferences of investors. While some people may prefer AI-powered tools over human advisors, some may choose the latter.

The Mid-Way: Partnering AI With Human Intelligence

In the end, the quest may not be about humans or machines but a partnership between the two. The answer cannot be replacement, but collaboration. AI has been a blessing to several industries, and leveraging its potential can be a great idea. Rather than replacing one with the other, industries are looking for ways to collaborate AI with human intelligence for the best results.

This is like a situation where your financial advisor, like Meera in Rohan’s case, uses AI to analyse vast amounts of data while saving both time and effort. These reports, when combined with human intelligence, can bring the best financial advice. This way, you can have both quick reports and the emotional and human intelligence as well.

Simply put, AI and human intelligence together can deliver something neither could fully provide alone. That's what the financial advisor industry may look forward to.

End Words

The use and scope of artificial intelligence in the financial advisor industry are still being explored. However, it may be right to say that the future may be a combination of AI and human intelligence rather than AI tools replacing human financial advisors. Basically, it is less a question of “man versus machine” and more about “man with machine.” Thus, you may see AI being leveraged in this industry for more robust advice and better planning.

Above all, the regulations by the government also remain a factor to consider. Depending on the government's stand on the extent of use of AI in different industries, such as financial advisors, it may also affect the future. Stay connected with us at Jio Insurance Broking for regular updates and insightful details!