A new study conducted by AI Fintech Aveni and YouGov has revealed the vast potential for AI to revolutionize the UK’s financial advice sector.
This survey sheds light on a significant market opportunity, estimated at £50bn, poised for financial advisers who are willing to leverage AI to bridge the generational trust gap in financial services.
The survey uncovers a stark divide between different age groups concerning trust and the use of financial advisers. While confidence in financial advisers remains high among existing users, with 93% trusting in their adviser’s understanding of their personal financial needs, younger demographics show hesitancy.
Only 24% of those aged 35-44 have engaged with a financial adviser, compared to 49% of those over 55. This indicates a clear opportunity for advisers to target younger clients who are less engaged with traditional financial advising methods.
Moreover, the receptiveness of younger individuals towards AI-driven financial advice is notable. A substantial 83% of respondents aged 25-34 would be comfortable using AI for financial guidance if it meant reduced costs, whereas this comfort level drops significantly to 33% among those 55 and older.
This suggests that AI can play a crucial role in making financial advice more accessible and affordable, particularly for younger clients seeking cost-effective and personalised financial planning tools.
The report also highlights the value younger professionals place on the accessibility improvements that AI can bring to financial advice. Eighty-six percent of respondents in the 25-34 age bracket value AI’s potential to enhance adviser accessibility, viewing this as a key component of their financial planning experience. Conversely, only 30% of the older demographic feels the same, pointing to a preference for traditional, relationship-driven advice among this group.
David Kaye, CEO of Puma Investments, reflects on the evolving demands in financial advice, stating, “This research reinforces the importance of financial advice and maintaining personal relationships while also highlighting the potential for advice firms to materially improve their service to clients by adopting AI technology.”
Joseph Twigg, CEO of Aveni, comments on the dual opportunity presented by AI, “AI presents a clear opportunity to enhance the accessibility and affordability of financial advice, catering to younger, cost and impact-conscious consumers. But it also reveals the importance of high-touch, personal interactions valued by older generations.”
Jeff Lange, CEO of TFAS Enterprises, adds, “AI has the potential to revolutionalise financial advice by making it more accessible to a broader demographic. The tools it provides can help advisers to target specific customer segments, offering personalised and insightful interactions to attract new clients needing financial guidance.”
This study not only underscores the importance of integrating AI into financial advising but also highlights the critical need for a balanced approach that respects the preferences of different generations. With the predicted generational wealth transfer of £7 trillion in the next decade, financial advisers equipped with AI are well-positioned to capture a significant share of this emerging market.
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