The Banking & Payments Show: AI as Your Financial Advisor. What Happens When Technology Takes the Lead?

In today’s episode, we talk about whether regulators will allow, and consumers will adopt, AI over human financial advisors. Will AI close or widen the wealth gap? What happens if an AI financial advisory loses your money? Join the discussion with host and Head of Business Development Rob Rubin, and Analysts Lauren Ashcraft and Jacob Bourne.

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Episode Transcript:

Rob Rubin (00:05):

Hello everyone and welcome to the Banking and Payment Show, A Behind the Numbers podcast from eMarketer. Today is March 11th, 2025. I'm Rob Rubin, head of business development at eMarketer and your host today. Today we're going to have a chat about whether regulators will allow and consumers will adopt AI over human financial advisors. Joining me today are EM analysts, Jacob Bourne and Lauren Ashcroft. Hey guys, how are you doing?

Lauren Ashcraft (00:35):

Good to be here.

Jacob Bourne (00:36):

Yeah, thanks for having me today.

Rob Rubin (00:39):

Lauren, you've been on more recently than Jacob. I haven't had you on in a while, so I'm really glad to have you back.

Jacob Bourne (00:44):

Thank you.

Rob Rubin (00:45):

And I'm glad to have you back too, Lauren.

Lauren Ashcraft (00:46):

I'm very happy to be back here.

Rob Rubin (00:48):

I was less glad. I want to start off with a quick icebreaker because this topic is on AI. I want to know how has AI changed your household life, not your work life or not your personal interests in doing research or stuff like that, or that you like to write poems and it's helpful or it does good with haikus. I just want to know, are there household chores that you've started to use AI for that save you time?

Jacob Bourne (01:18):

I mean, in a way I do tend to, if I have a question about a household project I'm working on, I mean going to AI to ask the question seems to save me time in terms of finding a good answer. So yeah, I think it does save me time though overall, I'm definitely spending more time on a digital interface than previously. So there's that too.

Lauren Ashcraft (01:46):

That's true. I also go to ChatGPT to ask it things like where to go on vacation. So not on incredibly important or useful tasks in my daily life yet. But yeah, I use it kind of like a search engine and it's pretty helpful.

Rob Rubin (02:03):

Yeah, it is a good search engine. We've been using it to help. I have a college age kid now, not on a meal plan, so he is living in an apartment and you can ask ChatGPT to create meals. I need to buy five ingredients at Trader Joe's. I need five meals out of five ingredients, and then create the grocery list.

Jacob Bourne (02:25):

And I've heard that's actually a popular use case. It seems like a lot of people are using it that way with meal planning.

Lauren Ashcraft (02:31):

It's really good to know.

Rob Rubin (02:32):

Yeah, we have so much to cover today on this topic. So let's get into our first segment with the headlines.

(02:42):

And in the headlines I pick an article to discuss, and for today I chose an article from Axios that reviewed the results of a survey from Northwestern Mutual about consumers' interest in AI versus human advisors. And while the plurality of respondents prefer humans, it was only 54%. So it wasn't like everybody, and it definitely skewed older. So older people preferred humans more than younger people, and there's no experiences with it yet. So it's based on what people preconceived notions are. So I'm going to go to Lauren first just to get the ball rolling. We'll all want an AI versus a human. Shouldn't we tell new college grads who are thinking about becoming financial advisors to look somewhere else?

Lauren Ashcraft (03:32):

I think that's kind of the question most careers are asking themselves right now is will AI take over my job in the next few years? I personally think that there will still be financial advisors and a need for them, but with change in regulations, they'll be able to lean on AI more and be more efficient. That's what I think will happen.

Rob Rubin (03:54):

Well, Jacob, that's perfect to ask you that the new administration's, Trump administration is all about removing regulations, not making new ones. Does this make it a great time to launch an AI financial advisor tool?

Jacob Bourne (04:08):

I mean, certainly in that sense, absolutely. Yes.

Rob Rubin (04:11):

They're not looking, do it.

Jacob Bourne (04:13):

Yeah, I mean the Trump administration I think has made it pretty clear. It is planning on very lax, it's not no regulations on AI at all. We're also seeing the erosion of some consumer protection. So perfect time from that standpoint though, I think just like with the human advisor, banking customers are going to want to see that the AI financial advisor doles out good advice. And if it doesn't, well that's a problem.

(04:37):

So I think the takeaway here is number one, this technology is still under development. It's not mature. We can expect that there are going to be bugs with it, and then we're talking about the financial sector. Those bugs are probably going to have some risk involved that people don't want. So I think there's a lot of potential for AI being used in the financial sector, including for financial advice, but it's going to be a long road ahead, I think, to get it to where the vision is.

Rob Rubin (05:05):

I think this is an absolutely perfect place to jump to our next segment, For Argument's Sake.

(05:13):

And here we're going to argue nicely about whether there's going to be a place in the future for humans as financial advisors. And according to the CFP board, there are about 95 certified financial planners in the US. So the thing that I want to ask you guys is I think that there isn't going to be a loss of jobs in this sector that it would be okay to recommend for someone to do it. Lauren, what do you think?

Lauren Ashcraft (05:41):

I agree that-

Rob Rubin (05:42):

I wanted you to disagree.

Lauren Ashcraft (05:43):

Okay.

Rob Rubin (05:44):

Go on.

Lauren Ashcraft (05:44):

Sorry. All right. I think that there will be a little bit of a decline in the financial advisory jobs. That's just because as they're able to lean on AI more, they'll probably be able to take on more clients so that just more clients per advisor.

Rob Rubin (06:06):

Okay. All right.

Jacob Bourne (06:06):

I have a bit of a nuanced answer to this. I think we're going to see significant reduction in the number of entry-level financial planners, but your question was certified.

Rob Rubin (06:17):

Yeah, That's what CFP means. Certified financial planner.

Jacob Bourne (06:22):

So I think for the certified CFPs, I think we're going to see, I agree. I think we're going to see about the same amount. I think that those jobs are going to rely heavily on AI. There might be consumers might have to pay a premium for them. At the same time, we're also looking at an aging population that's going to require more financial advice across the board. And so there's growth potential there that's going to be offset by AI. So we're going to see some change, but overall, I think we'll probably end up with about the same that we have.

Rob Rubin (06:54):

I feel like we're all agreeing in a way. I think it's going to stay the same, mostly because the population's going to grow, right? There's all sorts of reasons why it'll stay the same, but I think that maybe we can find some disagreement in our final segment, which is called Rankings.

(07:14):

I'm going to read four outcomes as a result of AI financial advising rolling out on a mass scale. We're each going to rank the outcomes by the one that's most likely to occur and the one that's the least likely to occur. I'm going to read the outcomes fast so everybody knows them and then we can chat about them for a few minutes.

(07:37):

The first is close the wealth gap. So AI financial advisors are going to close the wealth gap. The next is AI financial advisors are not going to be allowed to lose by consumers. The third one is that AI financial advisors, or broad adoption of that, is going to create new systematic risks or systemic risks that we hadn't actually thought of before. And the fourth is that it's going to further advantage rich people. So where do you think we are in terms of will AI financial advisors help close the wealth gap? Is that a 1, 2, 3, or 4 on your list?

Lauren Ashcraft (08:15):

For me, I think it's the most likely thing to happen because-

Rob Rubin (08:19):

That's fantastic.

Lauren Ashcraft (08:20):

Because it helps with accessibility and maybe there is perceived barriers with getting a financial advisor and going into a financial advisor's office. But if you feel fewer barriers downloading an app on your phone, it might be the first time that people are willing to invest for try it out.

Rob Rubin (08:41):

I hear that. Jacob, where's it on your list?

Jacob Bourne (08:44):

Yeah, I gave it a two. I think that it is going to democratize financial planning to a certain extent. People are going to have more access to financial literacy and then also just the ability to rely on AI to make decisions for you. So I think it's going to have some effect. But of course, I mean, we're talking about closing the wealth gap. That's a huge topic that has so many factors, including other pressures from AI. So I think I'm kind of in the middle about that.

Rob Rubin (09:15):

I gave it a four, meaning that I think it's the least likely of this list to be true.

Lauren Ashcraft (09:19):

There we go. We disagreed.

Rob Rubin (09:23):

And the reason I say that is because I think that the AI financial advising is going to be, the ones that cost a lot more money, are going to be the ones that do the best. And the ones that are free are going to be pushing sponsored products your way and not giving you good advice. So I don't know that it's actually... I'm not saying that more people aren't going to get financial advice, I just don't think it's going to close the wealth gap.

(09:51):

But the next one is, and this is kind of an interesting one, that AI financial advisors aren't going to have any permission to lose because consumers think computers are smarter than humans. They can consume information much faster so that they should be able to pick all the winners. And if you use a financial advisor who's helping you make choices for different financial products and you lose money, that's not going to fly. What do you guys think? Well, Lauren, it's at a two, three, or four for you. You already gave it a one. You gave up your one.

Lauren Ashcraft (10:30):

I would give it a three. Just as a writer who has seen ChatGPT try to write things, I'm a firm believer there's always going to be a need for humans overseeing financial advice in this process, especially in banking where there's such a risk aversion. Yeah.

Jacob Bourne (10:47):

Yeah. I also gave it a three, and I agree with what Lauren just said. I also think that people do tend to... Well, people are very, there's aspects of AI that people are very uncomfortable with. But you're right, Rob, that people think that in some ways machines are more infallible than humans. But I think that also that might make people more accepting of those potential losses. I mean, we know that markets are volatile. Sometimes a loss can be a gain down the road, and people might kind of give AI the benefit of the doubt in that regard. But yes, again, to Lauren's point, there's still going to be human oversight too. There's going to be some type of human accountability, I think ultimately for AI's decision making. So I give it a three.

Rob Rubin (11:31):

Yeah, honestly, I was in between a two and a three here. I sort of think that it's going to take a while for consumers to think that the computer can make bad choices. So we'll see. But I think it's going to be really interesting how it rolls out about whether it can lose or not. And then the other one, the third one is that its broad adoption will actually create new systemic risks.

Jacob Bourne (11:55):

Yeah, I gave it a one. It absolutely will. AI is a high risk, high reward technology, and it could be one outcome that we see that AI is just making all the same decisions. But I mean, AI can be unpredictable too, especially generative AI. And so I think some of these systemic risks are things that might just fly under the radar and just kind of have cascading effects that we're not able to foresee. And so I think that's the biggest systemic risk are things that aren't obvious.

Rob Rubin (12:24):

But won't they have AI tools to find the things that aren't obvious?

Jacob Bourne (12:29):

I mean, I think we're talking about a very advanced AI, so we have to wait and see on that one.

Rob Rubin (12:34):

Lauren, where are you with this one?

Lauren Ashcraft (12:36):

Yeah, I think it's also very likely I gave it a two. And for the same-ish reasons.

Rob Rubin (12:42):

I gave it a one too. I have to say that I'm pretty sure that the market has its own life. And when you introduce these things on a scale, I think that we don't know what the outcome is going to be.

Jacob Bourne (12:56):

And the other thing is that when we rely on it, then it's harder to unplug. And once you see that there's a risk there, there's a negative outcome than what do you do if everybody is relying on this technology?

Lauren Ashcraft (13:08):

That's true because chatbots have gotten a couple of companies sued for quite a lot of money for mistakes, and I'm just imagining what the fallout of AI advisors losing your entire wealth could be.

Rob Rubin (13:23):

Well, broad things like it didn't really understand your risk tolerance. It invested in things that you wouldn't have wanted to invest in, or you didn't understand what the risks were.

Jacob Bourne (13:37):

Absolutely. Which can happen with a financial advisor.

Rob Rubin (13:39):

It can totally happen with a financial advisor.

Jacob Bourne (13:41):

Again, it's the accountability questions different, it seems.

Rob Rubin (13:46):

And then the last one, which now I can do the math and figure out what your numbers are, that AI financial advisors is going to further advantage the wealthy.

Jacob Bourne (13:54):

I went with the same score too as the closing the wealth gap score, for obvious reasons. I think it certainly could advantage the wealthy because as we see with OpenAI's 200 per month plan, well who can afford that, but the wealthy? And so if you have limited access to the most advanced tools and almost only a sliver of the population is going to have access to it, at the same time, I think even less high performing tools aren't necessarily going to give bad advice at the same time. So I think it's still a benefit to closing the wealth gap, but it might be overshadowed a bit by the advantage that wealthy people gain from having access to higher powerful systems.

Rob Rubin (14:33):

Lauren, you think this is the least likely of these four outcomes?

Lauren Ashcraft (14:36):

Yeah, I was approaching it from the direction of what I see it takes for banks to build relationships with the most affluent of their customers. And there's a lot of effort that goes into attracting and retaining mass affluent clients and that is very human and knowing exactly what they're looking for, their risk tolerance, and then not making mistakes that I think AI isn't ready to.

(15:04):

So just in terms of the amount of effort that I see banks putting in, this one is going to take the longest, but I do think it will benefit the wealthy whenever it gets to the place of when these advisors and just more broadly professionals at banks can rely on AI to make recommendations. As part of the process, but they'll still need to be at the top of that equation.

Jacob Bourne (15:36):

Yeah. Lauren, are you kind of saying that you think that the wealthiest clients are going to be less trusting, at least initially, of these AI systems?

Lauren Ashcraft (15:41):

Yeah, I think just like what's at stake for them. I think if they have a good-

Jacob Bourne (15:46):

That's true.

Lauren Ashcraft (15:46):

If they have a good relationship with somebody at a bank or firm that they've been with for a long time, they seem to me like they'd be the least likely to just kind of go all AI.

Jacob Bourne (15:58):

I mean, I think lower income people probably have high stakes too, that they have less money to play with and lose.

Rob Rubin (16:01):

I took a similar approach to you, Jacob, because I think that there's going to be an arms race for whose models produce the best outcomes, and that the people that are actually paying for the financial advice versus the freemium version are the ones that are going to get the newest best models first. And then when there's a new model to introduce, they'll cascade it down their sort of tiered offerings. So they could all be a theoretically hybrid offering, but the one on the high end is very human and gives you tickets to sporting events. It's still that high touch.

Jacob Bourne (16:50):

My final prediction on these two particular questions is I think in the near term, it's going to close the wealth gap and then long term, once we get these super high powerful models, it's going to-

Rob Rubin (17:00):

Expand.

Jacob Bourne (17:01):

Further advantage the wealthy.

Lauren Ashcraft (17:03):

I can agree with you there.

Rob Rubin (17:04):

I think we are all going to agree there, and I think this is a fantastic place to thank you guys for, this has been so much fun. So thank you.

Lauren Ashcraft (17:10):

Same. Thank you.

Jacob Bourne (17:12):

Yeah, thanks for having me.

Rob Rubin (17:13):

Yeah. I want to thank everyone for listening to the Banking and Payment Show, and also thank you to our editor, Victoria. Our next episode is on April 8th, so be sure to check it out. See you then. Bye, guys.

Lauren Ashcraft (17:25):

Bye.

Jacob Bourne (17:26):

Bye.