The Rise of AI in Financial Advising

Artificial Intelligence (AI) is transforming the financial advising landscape, enabling advisers to enhance their services and deliver better outcomes for clients. As members of Vanguard’s Financial Advisor Services team, we engage with financial advisers across the country to explore how AI can be leveraged responsibly to optimize investment results. Our primary focus is on improving investor outcomes, recognizing that utilizing AI can free up valuable time for client support. Our research underscores the significance of behavioral coaching as a key benefit for clients.

To effectively harness AI for improved outcomes, advisers must first understand its capabilities and build trust around its use. Based on over 100 discussions with advisers in 2025, we’ve identified several common questions surrounding the integration of AI into their practices.

How can I get started using AI?

Before diving into AI, it’s essential to establish a clear “north star” that defines what you aim to achieve through its implementation. This guiding principle should align with your company’s mission and incorporate a governance framework. Vanguard’s approach is focused on using AI to foster better investor outcomes in a responsible manner.

For advisers new to AI, quick and practical productivity enhancements are often sought first. AI can be utilized in various aspects of client interactions, such as:

• Before meetings: Generating preparation materials that summarize email correspondences and previous meetings recorded in your Customer Relationship Management (CRM) system.
• During meetings: Using AI for transcription and note-taking, allowing you to remain fully present and engaged.
• After meetings: Creating personalized follow-up communications to maintain client connection.

As you continue integrating AI into client interactions, the system will learn from your feedback, enhancing its database of client communications for improved draft quality in the future.

Between client meetings, advisers often spend considerable time examining complex documents such as market trends, forecasts, and economic policies. At Vanguard, we employ GenAI tools to summarize market updates, helping advisers craft tailored insights efficiently, ensuring that relevant information reaches clients promptly. Rapid communication is vital for building trust, and AI plays a crucial role in this process.

However, it’s important to remember the saying “garbage in, garbage out”; the effectiveness of AI hinges on the quality of the input data. Many advisers have highlighted inconsistent data as a major barrier to realizing AI’s full potential. Therefore, data classification and architecture are essential components of any enterprise AI strategy.

As advisers accumulate data for AI systems, proper classification becomes paramount. Organizations should implement systems that establish access levels for various types of information, ranging from simple emails to sensitive client data. It’s common for businesses to have policies classifying data by confidentiality levels, and AI tools must operate within these guidelines. For larger organizations, hiring data engineers is an effective initial step toward ensuring data accountability and facilitating efficient AI tool functionality.

How do I find the right vendors?

When choosing AI vendors, consider your north star alongside your current technology stack and data infrastructure. Select vendors capable of integrating existing tools—like CRM systems, email platforms, and content repositories—to minimize the disjointed “swivel chair” workflow often associated with non-integrated systems.

Ensuring enterprise data privacy is crucial; this guarantees that your data remains secure within your organization. Your chosen vendor’s technology should clearly outline which data it can and cannot use, preventing any sensitive information from being incorporated into the AI model during user interactions. While many providers claim to offer this assurance, validating it through a pilot period is advisable.

Furthermore, it’s wise to have multiple levels of “human-in-the-loop” governance reviews, complete with quality checks, before any AI application is widely deployed. This strategy can help mitigate potential inaccuracies or biases, ensuring the content generated is compliant and in line with your brand standards.

Lastly, employees should receive training on appropriate use cases for any new tools introduced.

What’s next with AI?

In discussions about AI adoption, I often categorize the process into three phases: assist, augment, and action. Currently, the industry is well into the “assist” phase, with advisers employing algorithmic models to project Social Security income and healthcare costs in retirement.

In the near future, we anticipate GenAI tools advancing to the “augment” stage, assisting advisers with portfolio evaluations, analyses, and recommendations. Eventually, we will transition to the “action” stage, where AI will not only assist but also take actions on behalf of the adviser. This will allow advisory firms to utilize AI agents for tasks such as monitoring portfolios, rebalancing, and routine client service, enabling advisers to concentrate on strategic planning and cultivating client relationships.

From leveraging quick productivity gains to establishing a solid data infrastructure and selecting appropriate partners, successful AI implementation begins with a clear purpose and effective governance. By adhering to these principles, advisers will not only streamline their operations but also reclaim time for what truly matters: guiding clients through intricate financial decisions with confidence and care.

In conclusion, the thoughtful integration of AI in financial advising is not just about technology; it’s about enhancing human connections and fostering trust. Embracing AI enables advisers to navigate the complexities of finance while prioritizing client needs.

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This article reflects the views of our contributing adviser and not the Kiplinger editorial team. You can verify adviser records with the SEC or FINRA.