Among the potential disruptions facing advisers artificial intelligence is set to have the greatest impact on client portfolios and advisory practices over the next five years, according to research by Natixis.
Three quarters of advisers (76%) believe the AI trade still has a long way to run and 69%, think AI has the potential to drive markets for the next 20 years, Natixis Investment Managers’ 2026 Finance Adviser’s survey found.
AI usage is also ramping up in advisers’ own own practices; 71% of advisers said they are already implementing the new technology and 80% think those who adopt AI will have a competitive advantage. Overall, 74% said AI can free them up to spend more time with clients, with 61% using AI to write emails, take meeting notes and send out educational materials; 56% using it to summarise market commentary and economic data; and 40% deploying AI for portfolio and risk analysis.
However, 68% of respondents said implementing AI into their existing workstreams has been more challenging than expected.
Despite enhancing adviser capabilities, the increasing sophistication of AI models are also posing a significant competitive threat, the findings show. Among millennials 49% said they prefer digital advice to traditional in-person models, with 40% of Gen Xers falling into this bracket.
Accordingly, 43% of advisers are predicting that in five years’ time, improved DIY tools for self-directed investors will be their biggest competition while only 11% think they will be competing with other advisers.
However, only 30% believe it will put them out of business, with 73% of advisers saying investors are taking unnecessary risks by turning to an AI agent for advice, possibly due to the quality of the prompts individuals enter into AI systems, and the propensity for AI to hallucinate. Overall, 82% of advisers are focusing on personal relationships and their fiduciary responsibility when they position their value for clients compared to AI.
Darren Pilbeam, Head of UK Sales Natixis IM, said: “Advisers are facing a number of disruptors as the industry contends with short term challenges presented by an uncertain market as well as larger structural shifts as a result of AI, digital competition, ageing clients and a wave of industry retirements.
“In the near term they will need to focus efforts on reassuring investors facing uncertainty, but to succeed in the long run the number one factor for advisers will be demonstrating the value they bring that goes beyond asset allocations.”
