Artificial intelligence is making waves in the financial planning sector by helping process huge amounts of data and making hyper-personalized recommendations for clients, but the technology — while cutting edge — is reliant on good, clean data to work.
Broker-dealer investment firms like St. Petersburg-based Raymond James Financial Services Inc. and Milwaukee-based Northwestern Mutual have tapped into the technology to offer support to independent certified financial planners. However, decision-makers in the corporate offices of those mega firms still are ramping up AI to its potential, including getting the data ready.
For example, the advantages AI provides is only as good as its data, and firms need to act as a safety net to AI, such as when remaining industry-compliant, said a 2024 Investopedia report. "In a highly regulated industry, financial advisors should be cautious with large language models like ChatGPT. They need to double-check all advice and answers from the platform for accuracy, and avoid feeding private or proprietary information to the [AI models]."
As such, Orlando Business Journal reached out to local financial planners about the emergence of AI in their field. Some spoke on the record and others off the record due to agreements with their affiliated firms, but they all agreed the broker-dealer firm above them dictate the future of AI in the industry.
Take Ken Bradshaw, an independent financial planner who relies on San Diego-based LPL Financial’s securities and advisory services to steer him on matters related to data and AI. “I know the firm does that. I'm not aware of the specifics or best practices in that space,” he said.
Similarly, Managing Partner Will Grafton of Grafton Wealth Advisors said he and the other financial planners he knows talk about AI and how it impacts his profession, but as an affiliate of LPL Strategic Wealth Services, he looks to LPL to provide platforms — like LPL ClientWorks — and other resources to guide the use of AI.
Still, the success of AI, the financial planning industry and ultimately its clientele is that the data input into systems is as accurate and updated as possible.
OBJ asked Grafton how he manages data and what role AI plays in his work.
Is there an urgent need for financial institutions to get their data clean and organized to support the development of AI use cases?
Yes, clean and organized data is the foundation of success for financial advising teams. I have taken a proactive approach, investing in technology and prioritizing data.
Is there a way you go about making sure your data is validated and standardized, and all the values are filled in?
We … use a customer relationship management system, Wealthbox, to manage client data. These systems include built-in validation checks to ensure data integrity and completeness.
Generative AI is designed to use your stored data to help you with things like investment strategies and portfolio optimization. Do you use any of those kinds of tools?
I do utilize tools that analyze vast amounts of historical data, market trends and other relevant factors to generate insights for investment portfolios.
How do you go about organizing your client data?
We use specialized software to centralize and analyze client data, including financial accounts, assets, liabilities, income and expenses. Organizing data is essential to providing high-quality advice, minimizing risks, maintaining compliance and enhancing client relationships.
How does AI fit into the traditional financial planning industry?
Despite the enthusiasm for AI, there is an understanding that the human touch is irreplaceable. My clients expect me to leverage AI for data-driven insights, efficiency and precision, but they seek the understanding, expertise and relationship that only I can provide.
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