The Financial Conduct Authority is “bullish” about the adoption of artificial intelligence, but advisers much make sure they are doing the correct due diligence, according to Joseph Twigg, chief executive of Aveni.
Speaking to FT Adviser, Twigg discussed how AI is going to transform the industry and highlighted the due diligence firms will need to do before implementing tech into their systems.
Twigg said he had a meeting with FCA chief executive Nikhil Rathi a few months ago to discuss the growing interest of AI in the sector.
He said: “Rathi was super bullish on the adoption of AI, his catchphrase was 'I don’t let regulation get in the way of innovation'.
“We’ve got some long standing challenges in the industry such as the advice gap and productivity challenges and finally we might have a technology solution that can help solve them.
“And so the FCA are optimistic about the adoption of this tech but only when it's in a human plus fashion, meaning you're wrapping the tech around people to make them more efficient. You're not replacing large swathes of advice with AI advisers.”
Twigg said he was “utterly convinced” the industry was going to be “fundamentally transformed” in the next couple of years.
“Nothing new needs to be invented now with AI, it's all about adoption. And what we're seeing across the financial advice sector is the green shoots of product market fit.
“People are starting to ask us how our productivity tool works, how much time it will save them, how our compliance tool works? And the next step is going to be different parts of the value chain coming together,” he added.
Twigg said it will get to a stage where back office systems in collaboration with the AI will create a level of automation that will change things for advisers.
He said: “The ultimate objective within a couple of years is that a typical financial adviser will turn up to a meeting, will build a relationship with their client while everything else will be taken care of by the tech.
“CRM admin, report writing, the financial plan, everything will be taken care of but advisers will still have a place because people want to speak to actual humans when making material life choices.”
Advisers becoming proactive with AI
Twigg said in the past six months he has noted a real step change in the advice market with advisers proactively reaching out to suppliers in the AI software space.
Having AI software embedded into an adviser's daily workflow is going to bring “substantial change” according to Twigg.
“Having the AI as part of a CRM system or as part of your platform is going to bring real benefits but it's going to take a year to 18 months of working with industry and partners to iterate these products and to make sure firms are finding the right areas that advisers really value,” he said.
