Robot hands and fingers point to laptop button advisor chatbot robotic artificial intelligence concept

Clients still lack trust in the technology, Avaloq finds

The lack of trust that clients have in artificial intelligence (AI) means the uptake of Robo-advisers remains limited, Avaloq has found.

Its research conducted among more than 300 wealth managers and 3,000 clients globally found that just 6% of affluent to ultra-high net worth clients currently use robo-advisers.

Client trust still remains low with AI, the research found, as 24% UK wealth managers believe their clients could never trust AI for investment and 27% said their clients would never trust AI when it comes to financial planning.

This caution is echoed by UK investors, as only 7% would feel comfortable fully relying on AI for investment advice, versus 38% who would support a hybrid approach with AI tools supporting their wealth manager. More than half (55%) refuse to use any form of AI involvement for investment advice.

Avaloq said the caution may be explained by the traditional importance of human interaction in financial advice, which “forms the foundation of trust between advisers and their clients”.

Wealth managers open to the use of AI

Although client trust remains low, the research revealed that 87% of UK wealth managers believe AI will be integral to their future work, with the same proportion believing that AI will bring benefits to the wealth management industry.

It showed that the greatest potential for AI to support UK wealth managers with client onboarding, with 86% of those surveyed saying it would offer a major improvement.

Other areas where UK wealth managers believe that AI offers a major improvement include automatic summaries of client meetings (65%), automated compliance monitoring (64%) and automated regulatory checks (61%).

Avaloq head of data science & analytics Gery Zollinger said UK wealth managers recognise the “enormous potential” for AI to support them.

He said: “The potential use cases are vast, from automated processes which free up more time for managers to focus on clients and strategic decision-making to streamlined analytics and cost-effective services that expand access to advice.

“That said, there is still clearly a way to go when it comes to bridging the AI trust gap between wealth managers and their clients. For AI to be successful from a client perspective, wealth managers need to work closely with their clients to demonstrate the value AI can bring to their portfolios, while ensuring that the use and impact of the technology remain transparent and well-understood.

“AI can augment the service advisers provide to their clients, but the human element will always be vital.”

Source: PA