Tips & Resources

The Role of Artificial Intelligence in Financial Consulting: Expert Insights

Shawn Plummer
By Shawn Plummer
05 March, 2024

Discover nine ways financial consultants can maximize the potential of artificial intelligence without compromising customer service for their clients. Explore expert insights here:

a robot's hand representing AI shaking hands with a business man

Financial consultants are still divided on AI. While some have wholly adopted AI systems, others feel they cause more harm than good. But regardless of opinion, AI is here to stay. Instead of avoiding or fearing AI, or committing to be solely reliant on it, you must leverage its strengths and address its shortcomings.

You can’t risk inaccuracies during financial consultations. Clients trust you with their hard-earned money—carelessly offloading tasks will lead to losses. You should carefully plan your AI adoption strategy.

To help jumpstart your research, below is a list of ways financial consultants can maximize AI without compromising their clients.

1. Reliable Predictive Analytics

Every financial move comes with some level of risk. Whether you’re buying 100 Bitcoins or investing in stocks, success is never guaranteed. However, you can steer toward profitable results by making informed decisions. Use AI tools to pull real-time data on your chosen markets—analyze current trends, identify recurring patterns, and predict the most likely movements.

Jim Pendergast, Senior Vice President at altLINE Sobanco, warns finance professionals not to confuse data gathering with analysis. He says, “You can use AI to speed up data collection, but you and your team should still analyze the gathered insights yourselves. AI only pulls and collates information. Trusting it to analyze them will lead to poor decisions and inaccurate predictions.”

2. Fraud Detection

Prevention is better than cure when it comes to financial fraud. Set up AI systems that pull real-time data on your clients’ credit reports, bank accounts, and credit cards—watch out for unusual activities. Quickly request a credit freeze or fraud alert if you spot any red flags. It’s an efficient way to keep fraudsters from abusing your clients’ banking information any further. The integration of multi-factor authentication is another proactive step towards safeguarding sensitive financial information.

Andrew Pierce, CEO at LLC Attorney, says advisers should encourage their clients to use AI-driven credit monitoring tools. He says, “I understand that most people skip credit monitoring because it’s tedious and time-consuming. However, it’s also essential to prevent fraud attacks. To hasten the process, use AI-driven credit monitoring apps, e.g., Credit Karma or Mint, that compile your statements so that you can scan them under one platform. Report unauthorized purchases, loan applications, debit cards, and collection notices through these apps.”

a hand touching different icons representing customer service
Source: timify

3. Credit Score Reviews

All your clients should strive for excellent credit standing. With a good score, they’ll qualify for lower loan rates and have access to more banking services. Basically, banks trust low-risk debtors with better products.

The key to helping your clients get higher credit scores is constant monitoring. Advise them on simple strategies to improve their ratings, like taking out low-interest loans and paying off dues on time. Afterward, set up credit report monitoring systems and create a debt schedule. They should at least move up a hundred points after a few months if they stick to your strategies.

Tip: Encourage your clients to put their emergency savings in a certificate of deposit (CD) account instead of a regular savings account. CD rates typically yield higher returns because of their withdrawal restrictions.

4. Extensive Client Screening

While your finance firm might make more if your client base grows, note that not all business is good business. Beware of clients with ill intentions. It’s not unlikely for crooks to ask you to launder dirty money, set up shell companies, or evade taxes. Some might say their intentions upfront, but most won’t.

To avoid these individuals, screen your potential clients with an AI-driven background checker. Max Wesman, Founder & COO of GoodHire, says background verification goes beyond HR purposes. He says, “Background checkers can pull real-time data on almost any individual with a digital footprint. Within seconds, you’ll have access to their socials, published posts, and registered businesses, all of which you can use for identity verification.”

5. Portfolio Management

Managing finance portfolios includes a lot of rote work. Routine tasks like pulling finance records, updating spreadsheets, and tracking market movement could take several hours if you have many clients. You’ll eventually run out of time for other roles.

Instead of wasting your efforts performing robotic tasks manually, offload some areas of portfolio management. AI can effectively assist in compiling comprehensive profit and loss statements for each client, ensuring accuracy and efficiency. Only take on complex projects that require critical thinking and analysis. Leave small, tedious jobs like compiling insights, transferring data, and updating sheets to AI.

Linda Shaffer, Chief People Operations Officer at Checkr, warns financial advisers to check their systems for errors. She says, “Set aside a few hours weekly to test your AI-driven portfolio management system. Watch out for errors, bugs, and issues. Remember: even minor slip-ups could lead to significant losses if you continuously overlook them.

6. Cybersecurity Implementation

Finance consulting firms are responsible for a lot of Personally Identifiable Information (PII). Your clients entrust you with their credit reports, banking statements, income documents, and social security numbers. Losing their information to a data breach is a grave issue. IBM reports that a single incident could cost you around $4.35 million, especially if you carry highly sensitive data.

Considering these risks, focus on increasing your cybersecurity. Stephan Baldwin, Founder of Assisted Living, advises using AI-integrated platforms. He says, “AI detects potential threats fast, helping you stop crooks before they do much damage. Remember: time is of the essence when dealing with cyberattacks. A few minutes of delays could spell the difference between blocking a hacking attempt and losing all your data to hackers.”

an image of a animated chat robot
Source: timify

7. AI-Powered Customer Service

You can use AI to improve your customer service. Install an AI chatbot on your website that answers commonly asked queries, collects comments, guides site visitors, and redirects disgruntled clients. If you only respond manually, too many messages will end up going unanswered.

Jerry Han, CMO at PrizeRebel, encourages advisers to adjust their chatbot’s replies. He says, “Embed your chatbot with language that matches your overall branding and intended message. It will represent your firm to site visitors. If you carelessly use random language models that spit generic output, you’ll have trouble earning your prospects’ trust and respect.”

8. Lead Generation and Marketing

Make prospecting more efficient with AI-driven lead generation. Instead of sending cold emails to random people, use AI to trace individuals who match your ideal buyer persona. Zero in on your target market to boost your conversion rates. Ideally, you should contact warm prospects who need your consultation services and are likely to respond.

Michael Maximoff, Co-Founder & Managing Partner at Belkins, advises firms to apply the same tactic in their marketing efforts. He says, “Limit your ad audience size to a bare minimum. A high view count isn’t nearly as important as healthy conversion rates. On the contrary, a large audience only spikes your overhead and makes it harder to get an ROAS.”

9. Task Management

Use smart task management systems to streamline your workflow. You’ll save time if you can distribute projects, track deliverables, and message teammates under one platform. Toggling between work tools is inefficient and unnecessary.

Just ensure you choose a simple, convenient platform. While complex systems might come with several impressive functions, your team could hit trouble if they have a steep learning curve. Again, the goal is to make daily tasks easier.

Can AI Help Financial Advisors?

Yes, AI can help financial advisors. Utilize their functions without becoming solely dependent on them—prioritize quality service.

Just note that there’s no one-size-fits-all AI adoption plan. Check out platforms that suit your needs. Let’s say you need a more efficient way to manage your consultation bookings and team meetings. You could look into appointment booking platforms like Timify. It lets third parties schedule meetings themselves, thus cutting the need for back-and-forth confirmation emails. Sign up for a free trial to test for yourself.

Shawn Plummer

About the author

Shawn Plummer

Shawn is a licensed financial professional focusing on annuities and insurance for more than a decade. His former role was training financial advisors, including for a Fortune Global 500 insurance company. He's been featured in Time Magazine, Yahoo! Finance, and Bloomberg.

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