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What AI can do for your financial advisory business

AUG. 06, 2019

I have always been curious about trends, new products, and learning about the next “big shiny object” on the horizon. At the top of my list is artificial intelligence (AI).I recently read an article in LOMA Resource about the launch of a new app employing a technology that uses people’s facial analytics to allow them to buy life and accidental death insurance in minutes.1 It all starts with a selfie from your cellphone. Another article I came across addressed how artificial intelligence coupled with smartphones may help conquer diabetic retinopathy-related vision loss.2

AI is the New Frontier

Daugherty and Wilson in their book, Human + Machine – Reimagining Work in the Age of AI, tell us “AI is the next frontier for business investment and innovation.”3 Other research supports how AI can improve predictive capabilities to transform ways of doing business.4

AI and predictive analytics started me thinking about what other technology advancements are on the horizon, and what the implications are for the retirement industry. The reality is, technology has already impacted the way financial planners work with their clients. For example, some financial planners are using predictive tools such as “money scripts” to study their client’s financial decisions. Money scripts are “unconscious, trans-generational beliefs about money, developed in childhood, that drive adult financial behaviors.”5

Financial Services is a People Business

So, if AI is the next frontier, what does this mean for financial advisors? Based on what I’ve read about AI, I believe that if it truly adds value and is paired with the human element, it may change the way work is done. At the end of the day, regardless of the advances in technology, the financial services business is still all about people. I’m reminded of an advisor from a webinar that I attended recently, who used these very words to describe the retirement industry: “it is still a people business.“ And, because it is a people business, financial advisors will continue to need to master interpersonal skills to remain successful in the changing world.

Relationship Building for Advisors

A key aspect of interpersonal skills is relationship building. Effective listening, showing empathy and asking impactful questions are keys to building successful relationships. As the wealth transfer continues and millennials become more financially savvy, relationship building skills will become even more important for advisors in building and maintaining their client base. I have previously written on the three vital habits a financial advisor can have in building effective relationships.

The Importance of an Outward Mindset

Employing an outward mindset leads to making better decisions.6 An outward mindset consists of:
• Awareness of the challenges of others
• Altering actions to better assist others
• Assessing what is and isn’t working and making appropriate changes
Do you think inwardly, or is your mindset focused outside of yourself?

Emotional Intelligence in an Advisor’s Practice

AI may well be the next frontier but emotional intelligence (EI) is equally important. EI is a skill that is useful in managing your own emotions as well as understanding others and their emotions. Two components of EI that are especially critical for advisors are group awareness and relationship management. Group awareness is your ability to perceive emotions in other people and situations as well as understand what is really going on with them. In an advisor’s practice, group awareness leads to the ability to grasp the customer’s perspective.

Relationship management is your impact on others. Relationship management is particularly impactful in winning people over and it can lead to collaboration and cooperation. Refer to my post, Emotional Intelligence is not IQ, for more on the vital components of EI.

What Does AI’s Reach Mean For You?

Artificial intelligence is everywhere and will continue to impact how things are done in every industry. I believe AI coupled with interpersonal skills can truly be a winning combination and if embraced; can be a differentiator in the financial services business.

Here are two questions for you to consider:
• How will you learn more about AI and its impact on the financial services industry?
• What are you doing to sharpen your interpersonal skills?
The answers to these questions may position you to provide exceptional service to your current clients and obtain new clients.


  • 1

    Rankin, J.C. (2019). ‘Front Page – A roundup of significant news, trends and research affecting the industry’, LOMA Resource. April, p.7.

  • 2

    AI-enabled smartphones can prevent diabetic retinopathy-related vision loss.’ The Economic Times, May 1, 2019.

  • 3

    Daugherty, P.R. and Wilson, H.J. (2018). Human + Machine (Reimaging Work in the Age of AI, Business Book Summaries, EBSCO Publishing Inc. 2018.

  • 4

    Agrawal, (2018). Prediction Machines – The Simple Economics of Artificial Intelligence. Toledo, OH:  Great Neck Publishing Corporation.

  • 5

    Klontz, B.T. (2012). “How Clients’ Money Scripts Predict Their Financial Behaviors.” Journal of Financial Planning. 25. pp. 33-43.

  • 6

    The Arbinger Institute (2016), The Outward Mindset (Seeing Beyond Ourselves), Business Book Summaries, EBSCO Publishing Inc. 2018.