Creating a financial plan is a complex and often time-consuming process. On average, it takes about 10 hours to create the plan, and the planning process takes about 35 hours per client over the course of the year, according to Kitces Research.
An artificial intelligence-based planning solution can empower advisors to build flexible plans quickly and with a high degree of accuracy.
In many respects, AI's role in financial planning resembles the job of a golf caddy.
Golf appears to be a simple game. Grab a club, smack the ball and putt it into the hole. However, it's a complex pursuit that requires skill plus a knowledge of the course — enter the caddy. Caddies can inform a player of what club they'll need to avoid hazards on the course, help read the greens, and ultimately, provide their guidance on the next best action to take based upon each stroke.
Like the conditions on a golf course, the financial markets are dynamic. Market events and many other factors can affect a client's portfolio on a day-to-day basis, and an AI solution can help an advisor adjust their client's financial plans to coincide with changing life circumstances, retirement or budgeting objectives and shifting risk tolerances.
AI tools can serve advisors much like a caddy interacts with a golfer, suggesting next best actions for planning strategies in the form of hyper-personalized financial advice, enhancing outcomes for clients while freeing advisors to spend more time engaging with and prospecting for clients.
Let's examine some ways that advisors can deploy AI to build better holistic plans.
Financial Guidance Coupled With Enhanced Risk Management
Golfers rely on caddies to analyze each course and tailor a game plan to attack it. Every course presents different challenges, just as every advisor's client necessitates unique financial guidance.
Unlike traditional methods of financial planning, utilizing manually updated spreadsheets, AI can seek and recommend unique financial strategies for clients, assist with tracking of the plan over time and reconfigure it on the fly as their finances and/or the market dictates.
