Navigating the AI Revolution: What Financial Advisors Need to Know

If I’m being honest, when AI first came onto the scene, I felt overwhelmed by it, so I used it very sparingly.

Last September, I attended Hubspot’s annual conference, INBOUND. The overwhelming message throughout the event was that AI is the future (and the now), and we must embrace it. When used correctly, AI makes us better and more productive at what we do. I knew it was time to roll up my sleeves and dive in.

I’ve entirely hopped on the AI train now, even having ChatGPT create meal plans for my family each week. A task that used to take a significant amount of time is now done in less than three minutes with a few refinements and tweaks. So, if you’re just starting your AI journey and ready to tackle the AI revolution, this blog will cover everything you need to know.

AI Tools and Options

There are a few big players in AI. From chatbots to image generators, AI tools can assist with everything from answering questions to creating visuals.

• ChatGPT is likely the one that pops into your mind right away or the AI tool you’ve heard referenced the most. It’s one, if not the one, of the most widely used AI chatbots for answering questions, writing,  brainstorming…you name it! This is a great starting point for almost everything AI-related.
• Perplexity AI is an AI-powered search engine. Instead of outputting a list of links like Google, it reads and summarizes the best answers for you and cites sources so you can see exactly where the information is coming from. Since it concisely pulls everything together from multiple sources, it’s great for research and quick fact-checking without having to sift through multiple websites.
• Claude is similar to ChatGPT, helping you write content, brainstorm ideas, and answer questions. However, it was built with a focus on safety, meaning it tries to avoid harmful or misleading information more than other chatbots might. I’ve heard it’s a great writing partner and can help with more advanced tasks, like coding. 
• Google Gemini is Google's AI assistant, designed for search and content generation. You’ve likely interacted with Gemini daily when conducting any Google search. Google Gemini has been a game changer for me, as I can quickly find the answer to any question I throw Google’s way. But that’s not all. Gemini is also a chatbot that can help with content creation and basic tasks like other AI tools.
• DALL·E and MidJourney are the two big players when it comes to AI-powered image generation tools, which create images from text prompts. I personally haven’t used these tools, but they are a great benefit for those looking to incorporate visuals and graphics within their practice.  

And that’s not even scratching the surface. So many AI tools and resources help with basic tasks, from AI chatbots to coding assistance and business automation. Nowadays, many AI tools are also built directly within software platforms. We use Hubspot here at XYPN, and they have their own AI tool, BreezeAI. It’s a great resource built directly within our CRM, helping our teams prepare for meetings or refine emails. If you haven’t already, be sure to look at your tech stack and see which AI tools and support may be available to you at your fingertips.

Prompt Engineering 

AI begins with a prompt and a good prompt at that. Known as prompt engineering, this is the process of crafting a prompt that will provide you with the desired output from whichever AI tool you use. It may sound simple, but prompt engineering is so robust that whole courses and certifications surround it. 

Thankfully, for an average user, we can still use AI to get the outputs we’re looking for. That being said, the wording, structure, and context you provide will influence the quality of the output, and this is where the fun can come in. You can unlock more accurate and tailored results by experimenting with different phrases, adding details, or using examples. This skill improves with practice, and the more you use AI, the more you’ll discover which prompts work better than others. You’ll get a different result if you ask for a basic prompt vs. one that provides more detail and guidance. Let’s run through some examples:

Instead of asking, “Create a checklist for onboarding a new financial planning client.” you could say, “Create a detailed checklist for onboarding a new financial planning client. Include steps for gathering financial documents, setting up meetings, signing agreements, and integrating them into the firm’s CRM.”

Or instead of “Write a 500-word blog post on Roth conversions.”, you could provide more guidance on exactly what you’re looking for, “Write a 500-word blog post explaining Roth conversions in a conversational tone to a 40-year-old financial planning client considering retirement strategies. Include real-world examples, discuss the tax implications, and provide three actionable tips for those considering a conversion.”

Using AI as a Financial Advisor 

So, where does AI fit into your practice and essential role as a financial advisor? First off, let’s make it clear that AI is not here to replace you or the work you do. It’s here to assist you and make you more efficient at what you do. Think of it as a partner within your practice that you can work and brainstorm directly with. It’s a great starting point for idea and content generation. Need some ideas? Here are some ways you can lean on AI to help your business:

• Outline a blog post
• Draft an email newsletter 
• Refine lead nurture emails
• Write social media posts 
• Craft a webinar outline 
• Provide talking points for a presentation
• Create custom templates and checklists
• Take notes during a meeting
• Generate ideas for a business name if you’re starting your RIA

Using AI is a great starting point for any of these ideas, refining the prompts until you feel you’re at a good place with the outputs. Then, infuse your voice and authenticity to polish up the piece. Why? Well, it's worth noting that Google's algorithms favor original, authentic content and may downrank or completely ignore content detected as AI-generated. This can reduce your organic search traffic and limit your ability to reach new audiences if your content doesn’t appear in search results. Remember to add your originality and brand voice to everything you create to improve search rankings and continue connecting with your ideal clients.

And when it comes to client data, proceed with caution. AI uses inputs to improve its models. You don’t want to upload or share private client information/ data with AI tools. Plus, AI models are not always 100% correct, and you’d hate to share inaccurate information about a client's financial situation. 

The use of AI also likely warrants updates to your firm policies and procedures or even crafting a stand-alone policy governing the use of AI within your firm. Need support navigating what this looks like? The XYPN Compliance Team can help. As AI evolves, staying informed on SEC guidelines and regulations will be crucial. 

The potential is game-changing for financial advisors willing to embrace AI. AI can free up your time, make you more efficient, and ultimately become a partner within your practice. The key is using AI to enhance, not replace, the human connection that makes you and your firm great.