It is clear that technology – and particularly artificial intelligence (AI) – is driving a profound transformation in the world of financial advice.
For all the excitement, hype and experimentation, one thing is clear: AI will change the financial advice industry (and just about everything else).
Not just in terms of efficiency, but in fundamentally rethinking how advice is delivered, how it is derived, and how it serves clients in a more personal and dynamic way.
At ValidPath (and our parent group Rimbal), we’ve been thinking about and planning for the potential of AI for years.
In a Money Marketing article from 2022 titled ‘The future of advice is going to be dynamic’, we outlined the benefits of a dynamic approach to financial advice for managing client suitability, and how this needs to be a core part of your technology roadmap to support better client outcomes.
Recently, we’ve been developing a framework for how AI automation will enable a transition from ‘best-practice’ to ‘best-path’ financial advice.
Specifically, this means moving from a best attempt that relies on the adviser’s knowledge, resources and experience to delivering the best and most optimal solution tailored to each client’s unique circumstances and available information.
The promise of AI is to be able to provide the ‘best’ solution to clients, and with a dynamic advice model to optimise on an ongoing basis for suitability. This is an outcome-focused approach rather than the current ‘best’ practice standard which is largely process-driven.
While AI in financial services is not new, what is new is the number of AI tools targeting advisers
One of the other many positive implications of best-path advice and AI, is that it strongly will favour independent advice, as restricted models will lack the product and solution range needed – and the usual commercial and compliance rationale for restriction will no longer hold.
While AI in financial services is not new, what is new – particularly in the past 12 months – is the number of AI tools targeting advisers. From voice-to-text meeting transcriptions that pre-populate CRM systems, to tools that help advisers fill in fact-finds, generate suitability letters, and even compliance checks – AI is already making its mark. And it is easy to see why.
Advisers are time-poor and heavily burdened by admin, so anything that streamlines admin-heavy processes to free up time is welcome, and having a real impact.
Agents of change: How agentic AI could reinvent financial compliance
And while this is undoubtedly a net positive, it is important to understand the implications when engaging with AI startups – and be clear about what your objectives for each specific use-case application.
For example, bolting AI tools onto existing systems or legacy CRMs without considering long-term data integrity or strategic goals may provide quick wins but limit future opportunities – such as the larger AI opportunity derived from clean data and machine learning applications.
This is not necessarily a consideration for smaller firms, however, larger firms and networks need a defined technology, data and AI strategy, if AI is to be more than just a time-saving and efficiency tool.
An integrated strategy will be essential to remain competitive against technology-enabled firms
This means rethinking infrastructure, user experience, data protocols, and ultimately, architecting the business for an AI-driven future.
Why? Because an integrated strategy will be essential to remain competitive against technology-enabled firms, particularly as the industry moves toward an agentic future where AI agents become the primary way in which firms, clients, and stakeholders interact.
This marks a fundamental shift from traditional human-driven workflows to AI-driven services.
Although technology leaders like Sam Altman, Elon Musk and Jensen Huang are almost unanimous on an ‘agentic future’, the transition won’t happen overnight, and advisers will continue to play a vital role into the future.
At Rimbal and ValidPath, we believe this isn’t just an opportunity – it’s a responsibility. AI has the potential to strengthen the role of advisers, enable a more dynamic, optimised, and personalised client experience while driving better outcomes.
We will, therefore, continue to invest in the essential AI-driven infrastructure for advisers, and are excited about what the future holds for financial advice.
Angus MacNee is chief executive of Rimbal and ValidPath
