{"id":467828,"date":"2026-05-26T13:32:17","date_gmt":"2026-05-26T13:32:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/467828\/"},"modified":"2026-05-26T13:32:17","modified_gmt":"2026-05-26T13:32:17","slug":"analysis-what-advisors-should-tell-clients-who-use-ai-for-guidance","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/467828\/","title":{"rendered":"ANALYSIS: What Advisors Should Tell Clients Who Use AI For Guidance?"},"content":{"rendered":"

\"<\/p>\n

The editor looks at clients” use of AI tools to research financial material and even suggest ideas for investment, financial plans and more. What are the benefits and risks? Figures from law, technology and wealth management explain the territory and what lies ahead. \t \t \t \t \t \t \t \t <\/p>\n


\n (An alternative\u00a0version of this analysis appeared on
\n Family Wealth Report, sister news service to this one.
\n The implications of these issues are global, so we hope readers
\n across the financial jurisdictions of the world find these
\n comments useful.)<\/p>\n

AI resembles a \u201cfive-year-old genius\u201d that can cut through
\n information\u00a0and come up with answers faster than the
\n sharpest student. A question, however, is how far HNW individuals
\n use it to plan their finances.<\/p>\n

As of today, while the technology has grown rapidly, it appears
\n that while AI can assist with basic tasks, it does not yet have
\n the personal touch or the accountability and regulatory oversight
\n that a financial advisor should have.<\/p>\n

Surfing the internet, your correspondent found examples of
\n YouTube videos about topics such as \u201cAsking ChatGPT for financial
\n advice,\u201d\u00a0\u201cGet Out of Debt Using ChatGPT,\u201d and “How To Use
\n ChatGPT-5 to Build INSANE Financial Models.\u201d A Reddit page has
\n the headline: \u201cI use copilot as a financial advisor, is that a
\n good idea or should I make an appointment with a real one (that
\n is if I can afford it)?\u201d<\/p>\n

It\u2019s clear that this is a trend. But one of the issues that came
\n to the surface following the 2008 financial crisis was that
\n advisors needed to be more mindful of their\u00a0fiduciary
\n responsibility to clients. If that is important, where does AI
\n fit in, given that it may have biases acquired from from
\n underlying data?<\/p>\n

The soft power of seduction

\n As use cases have proliferated, one concern
\n that\u00a0has\u00a0arisen is not that AI puts humanity under tech
\n overlords, but something softer and more insidious. The
\n University of Tennessee law professor and writer, Glenn Reynolds,
\n has caught the mood with a new book, Seductive AI. As
\n the online description of his short book says, \u201cIt [AI] is not
\n about domination, but seduction. There is no doubt that AI is
\n useful, but `being useful is the subtlest form of seduction there
\n is\u2019.\u201d Central to professor Reynolds\u2019 contention is that AI has an
\n embedded desire\u00a0to be liked. And that\u2019s dangerous, he
\n writes.<\/p>\n

A reason why this matters for wealth managers and advisors is
\n that if the concept \u201ctrusted advisor\u201d has any meaning, it is
\n about telling clients what they might not want to hear and asking
\n insightful questions. Being able to say \u201cno\u201d at times and act as
\n an honest sounding board is vital. A question is whether AI can
\n ever do that consistently.<\/p>\n

Mainstream adoption

\n \u201cAI started to become a consistent conversation topic for our
\n clients around 2023 \u2013 and the urgency accelerated sharply after
\n generative AI tools started seeing mainstream adoption,\u201d Warren
\n Finkel, managing director, Omega Systems<\/a>, a US
\n firm, told this publication in a recent interview. He is
\n generally positive about aspects of AI but has caveats.<\/p>\n

\u201cWhat we hear consistently from financial services firms is that
\n younger investors are arriving to conversations better informed \u2013
\n but not necessarily more accurately informed,\u201d Finkel said.
\n \u201cThey’ve done their research, often using AI tools, and they have
\n real opinions. That’s actually a positive shift in engagement.
\n The challenge is that AI outputs can look authoritative without
\n being vetted, contextually appropriate, or current. A model
\n trained on historical data and general principles isn’t
\n calibrated to an individual’s specific situation or the
\n regulatory environment their advisor operates in. The firms that
\n handle this well are the ones treating AI-influenced clients as
\n more engaged, not more difficult.\u201d \n<\/p>\n


\n Eduardo Arista, a US-based partner at law firm Holland &
\n Knight<\/a>, said AI is “increasingly visible” in client
\n conversations. He gave examples such as\u00a0questions sent in
\n chatbot form;\u00a0jurisdictional comparison tables;\u00a0a model
\n produced for them, and second-opinion requests after a client has
\n already run the topic through a model. “A chatbot will not
\n replace a trusted advisor. What erodes the relationship is the
\n advisor who cannot engage with the AI material a client now
\n routinely brings into the room. When a client hands you a chatbot
\n memo, they are asking, implicitly, whether you can do more with
\n it than they did. The advisor who cannot answer that question on
\n the spot has already lost ground,” he said.\u00a0

\n \u00a0

\n This news service\u00a0asked Arista whether\u00a0clients talk
\n about their own use of AI with their advisors. \n<\/p>\n


\n “Whether they talk about it depends on the client. Sophisticated
\n principals discuss it openly. Some hide it because they are
\n testing whether the advisor will reach the same conclusion. And
\n the next generation in UHNW families, the 35 and 45 year-olds who
\n will eventually inherit, increasingly bring AI output into the
\n room as a way of pressure-testing the lawyers their parents have
\n used for years,” he said. \n<\/p>\n


\n Arista listed the following examples of what tasks clients set
\n via AI: Structuring options across jurisdictions; side-by-side
\n comparisons of where to hold assets or where to relocate, the
\n kind of table a lawyer would not produce in a single sitting; tax
\n outcome modelling for events such as a move, an exit, a gift, or
\n a death;\u00a0second opinions on what an existing advisor has
\n already recommended; and drafting work\u00a0\u2013\u00a0trust language
\n and letters of wishes.<\/p>\n

Pros and cons

\n Joshua Landsman, wealth strategist and senior vice president at
\n Wilmington
\n Trust<\/a>, based in Palm Beach, Florida, sees risks and
\n opportunities for clients and advisors alike.<\/p>\n

\u201cPeople are risking not getting tailored advice to [meet] their
\n needs because they are not providing all of the relevant
\n information to the AI system being used to get the appropriate
\n advice,\u201d he said. \u201cAI is best used when the prompts are very
\n specific. Clients typically are unable to identify all the
\n potential issues based on their specific facts because of a lack
\n of knowledge, experience and awareness of those particular
\n issues.\u201d<\/p>\n

AI use is now mainstream. According to the 2026 Global AI In
\n Finance Report from KPMG<\/a>, more than three-quarters of
\n organisations use\u00a0AI in financial planning, reporting and
\n commercial analysis.\u00a0<\/p>\n

Almost every day, a financial services firm announces a new
\n AI-powered offering. Earlier in May, US brokerage giant Charles Schwab<\/a> said
\n that its first generative AI capability for retail clients had
\n been made available. The firm said one of its recent surveys
\n showed that among nearly 1,000 retail clients, more than 60 per
\n cent are interested in using AI, and nearly 70 per cent think it
\n can either support routine tasks or play a meaningful role in
\n investing when paired with human expertise.<\/p>\n

Tools in the box

\n Wilmington Trust\u2019s Landsman said clients indicate that they use
\n ChatGPT, Gemini and social media to research planning
\n concepts.\u00a0<\/p>\n

\u201cFor example, in one conversation with clients, they indicated
\n that they wanted to consider a particular trust structure based
\n on their research using AI. \u00a0The clients were researching
\n trust planning strategies to leverage before the sale of a
\n business and AI mentioned a Charitable Remainder Trust as an
\n option.\u00a0<\/p>\n

\u201cI asked the clients how much they gave to charity on an annual
\n basis and they said less than $25,000.\u00a0I explained that
\n while a CRT would help them defer capital gains taxes,
\n ultimately, assets would pass to charity and, if they weren\u2019t
\n charitably inclined, other strategies may be a better fit for
\n them. We reviewed their cash flow needs as well as legal
\n documents and suggested they consider a pre-transaction sale to
\n an intentionally defective grantor trust. Therefore, while AI
\n identified a potential solution for the clients, AI wasn\u2019t able
\n to have a deeper discussion because the clients didn\u2019t know how
\n to evaluate their own situation. I explained why the trust
\n structure did not apply to them based on their goals and
\n objectives,\u201d he said.\u00a0<\/p>\n

\u201cPeople are risking not getting tailored advice to [meet] their
\n needs because they are not providing all the relevant information
\n to the AI system being used to get the appropriate advice. AI is
\n best used when the prompts are very specific.\u00a0Clients
\n typically are unable to identify all the potential issues based
\n on their specific facts because of a lack of knowledge,
\n experience and awareness of those particular issues,\u201d he
\n said.\u00a0<\/p>\n

There is also an age difference to consider.<\/p>\n

\u201cI see more enthusiasm because many younger clients are not used
\n to having an advisory team to assist them and some parents do not
\n introduce their advisors to their children until much later in
\n life. Because of this, I see younger people leaning on AI more
\n because that is all they know from an advice perspective. I have
\n not seen a huge adoption of AI use by older clients, however,
\n when used, it\u2019s used to do initial research on a topic with a
\n request for an explanation by us as advisors,\u201d Landsman
\n said.\u00a0<\/p>\n

Even if clients don\u2019t use AI greatly, it is important for them
\n that their advisors are fluent with it, he said.\u00a0<\/p>\n

\u201cAI is a productivity tool that can help clients gather data
\n about their financial lives and then provide that organised data
\n to advisors to help them make decisions. I see AI being effective
\n to help clients create balance sheets and cash flow analysis for
\n example.<\/p>\n

\u201cFor clients, a professional advisor that has experience
\n navigating clients with varying levels of net worths through
\n different market cycles should remain invaluable as opposed to AI
\n which requires a great level of specificity and direction from
\n the user in order to optimise its value.\u00a0Advisors can use AI
\n as tools to gather information about their clients, organise that
\n information and translate it into outputs to help clients make
\n financial planning decisions about retirement, making a big
\n purchase, planning for inheritance, etc,\u201d
\n Landsman\u00a0said.\u00a0<\/p>\n

Not going away

\n In any event, AI is part of today\u2019s reality, Omega Systems\u2019
\n Finkel said.<\/p>\n

\u201cAI-generated financial guidance isn’t going away \u2013 and advisors
\n who dismiss it outright will lose the room. The better approach
\n is to engage with it. Understand what your clients are reading,
\n ask questions about where they’re getting their information, and
\n be ready to contextualise it rather than simply contradict it,\u201d
\n Finkel said. \u201cAI tools can surface ideas that are interesting
\n starting points, but they don’t know a client’s full financial
\n picture, their risk tolerance, their tax situation, or their
\n long-term goals. The advisor’s job is to be the layer of judgment
\n that AI can’t replicate. Younger investors in particular respond
\n well to advisors who take their curiosity seriously and can
\n translate complex concepts into plain language \u2013 which is exactly
\n what a good advisor should already be doing.\u201d \n<\/p>\n


\n Gaps and shadows

\n Arista argues\u00a0that there is still a space for human
\n advisors, and they need to remind clients about it.\u00a0 \n<\/p>\n


\n “The model is good at producing something that looks like the
\n answer. Whether it is actually the answer is the question the
\n client is no longer equipped to evaluate on their own. That gap
\n is where the advisor still earns the fee.\u00a0The move that
\n works is curiosity. If a client brings an AI memo to a meeting,
\n read it with them. Show them where the model is right, where it
\n is wrong, and why the gap matters. The result is not a defeated
\n client. It is a client who has watched their advisor demonstrate,
\n in real time, what 30\u00a0years of training adds to a tool they
\n can run themselves,” he said. “Telling clients not to use AI is a
\n wasted breath. They will use it. The advisor’s job is to teach
\n them when to trust the output and when to bring it to counsel
\n before acting on it.”<\/p>\n

Finkel pointed to some of the challenges AI brings advisors and
\n by extension, their clients.<\/p>\n

\u201cAI has accelerated the information gap between what financial
\n firms’ investors think they know and what the firms themselves
\n can verify or stand behind. That creates a real challenge for
\n advisors \u2013 and an equally real risk surface for the firms we work
\n with. The volume of AI tool adoption across financial services
\n has created a significant shadow IT problem.\u00a0<\/p>\n

\u201cFirms are deploying tools faster than their governance
\n structures can absorb them \u2013 employees are using AI to draft
\n communications, analyse documents, and interact with financial
\n platforms, often with no policy, no data inventory, and no clear
\n understanding of where that data goes. Every one of those use
\n cases is a potential security or compliance exposure,\u201d he added. \n<\/p>\n


\n Guardrails

\n Arista said there are four “guardrails” that advisors and their
\n clients should consider. Firstly, have an an approved-use policy
\n that names which tools are sanctioned, for what purposes, and
\n under what conditions, he said.\u00a0“Open-ended use across every
\n tool available is the most common source of trouble,” Arista
\n said. Second is data discipline: “Privileged information,
\n sensitive financial detail, and personally identifying material
\n do not go into a consumer tool that uses inputs for training.
\n Once that happens, the privilege is at risk.” \n<\/p>\n


\n Third and fourth are a need for human review of material
\n decisions, and vendor diligence on the tools themselves.
\n “Anything that creates a tax position, transfers wealth, or
\n modifies a structure goes through a qualified advisor before
\n execution. AI output is a starting point, not a substitute. The
\n same scrutiny [that] family offices apply to custodians and trust
\n companies belongs on AI vendors,” he added. \n<\/p>\n


\n A growing force

\n The financial planning sector certainly appears to see AI as a
\n major force.<\/p>\n

In an article from the May 2025 edition of the Journal of
\n Financial Planning, the author, Emma Foulkes, wrote: \u201cFrom a
\n consumer\u2019s perspective, we see increasing numbers relying on AI
\n to take material decisions on their behalf, mediate their
\n interactions with financial markets, and finally automate their
\n financial lives.<\/p>\n

\u201cRight now, AI is mostly used as an assistive tool to explain
\n concepts and options. Others already use them as advisory systems
\n that recommend actions.\u00a0<\/p>\n

\u201cWhen implemented well, AI can enable firms to innovate at pace
\n and better meet customer needs. It can enhance good outcomes by
\n improving personalisation, improve customer understanding and
\n support and driving better quality services at lower cost.
\n Agentic AI in particular could support people to automatically
\n optimise their household finances, reducing inertia through
\n automatic switching and potentially encouraging a saving and
\n retail investment culture, which could help us respond to
\n demographic changes in the UK.\u201d<\/p>\n

Foulkes warned that AI can amplify risks, such as embedded
\n biases, discrimination, exclusion, opaque decision-making
\n (particularly when multiple AI models interact), misleading or
\n hallucinatory advice and eroding\u00a0consumer trust. \u201cIt could
\n also introduce new risks if decisions are increasingly delegated
\n to AI agents, including reduced consumer agency, reduced consumer
\n understanding, unconscious manipulation and further decrease
\n financial literacy,\u201d she wrote.<\/p>\n

Back in 2013 in the UK, new advisor regulations called the Retail
\n Distribution Review forced some sales-based IFAs out of business,
\n creating what some feared would be an advice gap. Into that \u201cgap\u201d
\n moved digitally-driven wealth platforms, or
\n \u201crobo-advisors,\u201d\u00a0with the likes of Nutmeg, as it was called
\n then, being the most well\u00a0known. (The Nutmeg brand
\n disappeared as the firm was eventually absorbed into JP Morgan.)
\n A number of other \u201crobos\u201d took flight, for example\u00a0in the US
\n with Wealthfront and Betterment. While \u201crobo-advisor\u201d isn\u2019t much
\n used as a term\u00a0these days, it is arguable that AI represents
\n a new stage of it. <\/p>\n","protected":false},"excerpt":{"rendered":"The editor looks at clients” use of AI tools to research financial material and even suggest ideas for…\n","protected":false},"author":2,"featured_media":467829,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,174,175],"class_list":["post-467828","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-ie","tag-ireland","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/467828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=467828"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/467828\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/467829"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=467828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=467828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=467828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}