Betterment released the results of the new survey of 500 independent U.S. advisors with $10 million to $250 million in assets under management, which found:
- Nearly three quarters of advisors surveyed are millennials, which aligns with the growing needs of millennial investors who are quickly becoming high-value clients.
- Tech allows advisors to offer better client experiences. 43% of advisors said that with more time, they would spend more hours on financial planning and meeting with current clients.
- Retirement is critical, not optional, business: more than 80% of advisors are managing 401(k) plans, and of those who aren’t, the majority intend to.
The top use for AI among advisors, according to the survey, were:
- 56% assisting with client service tasks
- 53% creating personalized client communications
- 52% assisting with marketing efforts
However, the top uses for AI varied by generation, with Gen X and boomer advisors saying they were more likely to use tools like ChatGPT for creating personalized client communications.
We spoke with Tom Moore, Head of Betterment Advisor Solutions, formerly Betterment’s RIA custody division, to learn more about the survey’s findings and the how advisors are embracing technology.
Q: How do advisors use AI?
A: We saw that over half of advisors have seen success using AI to assist client service and operational tasks, as well as marketing. We found AI can take advisors far, but the last mile is where they step in to provide guidance. Interestingly, the top use cases for AI vary by generation, with Gen X and boomer advisors saying they were more likely to use tools like ChatGPT for creating personalized, one-on-one client communications. It depends heavily on the individual advisor.
Q: How does tech allow advisors to offer better client experiences?
A: Better service. Better outcomes. Meeting clients where they are. Technology frees up advisors to focus on delivering better service to their clients by automating manual administrative work. At the same time it can generate better client outcomes by efficiently managing portfolios and taxes. Lastly, much as we’ve seen across many industries, technology can deliver a more engaging, interactive experience to clients on their terms.
Q: Why are so many advisors managing 401(k) plans?
A: Advisors want to own their client relationships in their entirety so that they can provide holistic advice. For their small business owner clients, a big piece of the puzzle may be their company’s 401(k). Moreover, by adding retirement plan services to their practices they are adding a brand new revenue channel and building a pipeline of future wealth management clients.
Q: Do many employers offer advisors to work one-on-one with their employees?
A: Yes. We’ve found that both business owners and employees view having access to a financial advisor as a compelling benefit. For employers it is an easy way to amplify the value of your benefit offering and improve participation in your 401(k) plan, which is in the best interest of employees.