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

Summary

Behind the Numbers: EMARKETER Podcast

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

Release Date: March 11, 2025
Host: Rob Rubin, Head of Business Development at EMARKETER
Guests: EM Analysts Jacob Bourne and Lauren Ashcroft

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Introduction

In the March 11, 2025 episode of Behind the Numbers, hosted by Rob Rubin, EMARKETER delves into the evolving role of Artificial Intelligence (AI) in the financial advisory sector. Rubin engages with EM analysts Jacob Bourne and Lauren Ashcroft to explore whether AI will supplant human financial advisors, the regulatory landscape surrounding this transition, and the broader implications for consumers and the economy.

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AI in Everyday Life: An Icebreaker

The episode begins with a light-hearted discussion on how AI has permeated the hosts' personal lives. Rob Rubin asks Jacob and Lauren about their use of AI for household tasks beyond professional applications.

• Jacob Bourne (00:35):
  "I tend to use AI when I have questions about household projects. It saves me time finding good answers, though it does mean spending more time on digital interfaces."

• Lauren Ashcroft (00:44):
  "I use ChatGPT like a search engine for things like vacation planning. It's helpful, even if it's not yet integral to my daily life."

Rubin adds his own example of using AI for meal planning, highlighting its practical benefits in managing everyday tasks.

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Consumer Preferences: AI vs. Human Financial Advisors

Transitioning to the core topic, Rubin introduces a survey from Northwestern Mutual reviewed in an Axios article. The survey reveals that while a plurality of 54% of respondents prefer human financial advisors, acceptance of AI is growing, especially among younger demographics.

• Rob Rubin (03:32):
  "A plurality of respondents prefer humans, but it's only 54%. Preferences skew older, and there's a lack of experience with AI in financial advising."

Lauren Ashcroft addresses the broader question of AI replacing human roles across various careers, emphasizing the continued need for financial advisors augmented by AI.

• Lauren Ashcroft (03:54):
  "There will still be financial advisors and a need for them, but with AI, they'll become more efficient and able to serve more clients."

Jacob Bourne provides insights into the regulatory environment under the Trump administration, which favors less stringent regulations on AI. He posits that while this creates opportunities for AI financial advisors, the technology is still immature and poses risks that consumers are wary of.

• Jacob Bourne (04:08):
  "The Trump administration is pursuing lax regulations on AI, creating a favorable environment for launching AI financial advisor tools. However, the technology isn't mature yet, and bugs in the financial sector could deter consumers."

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Impact on Jobs: Will AI Replace Financial Advisors?

Rubin initiates a debate on the potential job displacement resulting from AI integration into financial advising. According to the Certified Financial Planner (CFP) Board, there are approximately 95 certified financial planners in the U.S.

• Lauren Ashcroft (05:40):
  "I believe there will be a slight decline in financial advisory jobs as AI allows advisors to handle more clients efficiently."

• Jacob Bourne (06:06):
  "There may be a reduction in entry-level financial planner positions, but certified CFPs are likely to remain stable. An aging population seeking financial advice could balance any declines."

Rubin concurs, suggesting that while the number of jobs may remain relatively constant due to population growth and increased demand, the nature of the roles will evolve with AI assistance.

• Rob Rubin (06:53):
  "I think the number of financial advisors will stay the same overall because population growth will sustain demand, despite AI's efficiency improvements."

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Rankings: Predicting the Outcomes of AI Financial Advisors

In the episode's final segment, Rankings, Rubinin poses four potential outcomes of widespread AI financial advisor adoption. The guests rank these outcomes based on their likelihood:

1. Close the Wealth Gap
2. AI Financial Advisors Are Not Allowed to Fail by Consumers
3. AI Creates New Systemic Risks
4. AI Further Advantages the Wealthy

Closing the Wealth Gap

• Lauren Ashcroft (08:15):
  Ranked as the most likely outcome, Lauren believes AI can enhance accessibility to financial advice, particularly for those previously deterred by barriers to traditional advisory services.

• Jacob Bourne (08:44):
  Assigned a mid-tier ranking, Jacob acknowledges AI's potential to democratize financial planning but remains cautious about its ability to fully close the significant wealth gap influenced by multiple factors.

• Rob Rubin (09:14):
  Viewed as the least likely, Rubin argues that premium AI financial services will predominantly benefit wealthier individuals, who can afford advanced models, thereby not effectively closing the wealth gap.

AI Financial Advisors Are Not Allowed to Fail by Consumers

• Lauren Ashcroft (10:28) & Jacob Bourne (10:28):
  Both rank this outcome as moderate likelihoods, citing the necessity for human oversight to mitigate AI's fallibility and regulatory considerations to ensure accountability in financial advice.

• Rob Rubin (11:31):
  Placing this slightly lower, Rubin contemplates consumer trust in AI's infallibility but remains uncertain about long-term acceptance of AI's potential mistakes.

AI Creates New Systemic Risks

• Jacob Bourne (11:55):
  Considered highly likely, Jacob warns of unpredictable outcomes and cascading effects from AI's integration into financial systems, emphasizing the high-risk nature of advanced AI technologies.

• Lauren Ashcroft (12:35):
  Similarly ranks this outcome as highly likely, pointing out the complexities and potential legal ramifications if AI advisors make significant mistakes impacting consumers' wealth.

AI Further Advantages the Wealthy

• Jacob Bourne (13:54):
  Aligning with Ruben's earlier perspective, Jacob foresees AI financial advisors exacerbating wealth disparities as affluent individuals gain access to superior AI tools, while others may rely on less effective or sponsored versions.

• Lauren Ashcroft (14:36):
  Views this outcome as the least likely, suggesting that top-tier banking relationships and personalized human oversight will mitigate AI's advantage for the wealthy, maintaining trust and high service levels.

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Conclusion

Rob Rubin wraps up the discussion by highlighting the consensus that while AI has the potential to democratize financial advice in the short term, its long-term impact may reinforce existing wealth disparities due to differential access to advanced AI tools. The guests agree that human oversight remains crucial to ensure accountability and trust in financial advising.

• Jacob Bourne (16:49):
  "In the near term, AI may help close the wealth gap, but long-term advancements could further advantage the wealthy."

• Lauren Ashcroft (17:02):
  "I agree with Jacob's assessment on both the potential to close the wealth gap initially and the subsequent advantages for the affluent."

Rob Rubin concludes by thanking the guests and listeners, teasing the next episode scheduled for April 8th.

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This episode of Behind the Numbers offers a comprehensive exploration of AI's burgeoning role in financial advising, balancing optimism for increased accessibility with caution regarding job impacts and systemic risks. The nuanced perspectives of Jacob Bourne and Lauren Ashcroft provide valuable insights for marketers, retailers, and advertisers navigating the digital transformation of financial services.

Transcript

[Jacob Bourne]

Foreign.

[Rob Rubin]

Hello everyone and welcome to the Banking and Payment Show, a Behind the Numbers podcast from eMarketer today is March 11, 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 you doing?

[Lauren Ashcroft]

Good to be here.

[Jacob Bourne]

Yeah, thanks for having me today.

[Rob Rubin]

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]

Thank you.

[Rob Rubin]

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

[Lauren Ashcroft]

I'm very happy to be back.

[Rob Rubin]

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? Like not like 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]

I mean, in a way I do tend to if I have a question about like a household project I'm working on, I mean, going to AI to ask the question seems to be, 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 Ashcroft]

But that's true. I also go to like ChatGPT to ask it things like where to go on vacation. So not on like 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]

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

[Jacob Bourne]

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

[Lauren Ashcroft]

That's really good to know.

[Jacob Bourne]

Yeah.

[Rob Rubin]

Yeah. We have so much to cover today on this topic. So let's get into our first segment with the headlines 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. While the plurality of respondents prefer humans, it was only 54%. It wasn't like everybody. It definitely skewed older. Older people preferred humans more than younger people and there's no experiences with it yet. It's based on what people preconceived notions are. Right. So I'm going to go to Lauren first just to get the ball rolling. We'll all want an AI versus a human, right? Like, shouldn't we tell like new college grads who are thinking about becoming financial advisors to look somewhere else?

[Lauren Ashcroft]

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]

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

[Jacob Bourne]

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

[Rob Rubin]

They're not looking do it.

[Jacob Bourne]

Yeah. I mean, the Trump administration, I think has made it pretty clear it's planning on very lax. There'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. You know, I think just like with the human advisor, you know, 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. So I think the takeaway here is, number one, this technology is still under development. It's not, 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]

I think this is an absolutely perfect place to jump to our next segment for argument's sake. 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 U.S. 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 Ashcroft]

I agree that I wanted you to disagree. Okay, go on. 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 and lean.

[Rob Rubin]

Okay. All right.

[Jacob Bourne]

I have a bit of a nuance 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]

No, that's what.

[Jacob Bourne]

Okay.

[Rob Rubin]

That's what CFP means, Certified financial.

[Jacob Bourne]

Right. So I think on. 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, you know, 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, you know, end up with about the same that we.

[Rob Rubin]

I feel like we are all agreeing in a way. Like I think it's going to stay the same mostly because the population is going to grow. Right. Like 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, 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. And I'm going to read the outcomes fast so everybody knows them and then we can chat about them for a few minutes. 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 Ashcroft]

For me, I think it's the most likely thing to happen because it's fantastic, 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 that. Try it out.

[Rob Rubin]

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

[Jacob Bourne]

Yeah, I gave it a two. I think that it's, 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 book wealth gap. That's a huge topic that has so many factors, including other pressures from AI. So I think, you know, I'm kind of in the middle about that.

[Rob Rubin]

I gave it a 4 meaning that I think it's the least likely of this list to be true.

[Lauren Ashcroft]

There we go. We disagreed.

[Rob Rubin]

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. 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? One, two. Well, Lauren, is it a two, three, or four for you? You already gave it a one. I gave up your one.

[Lauren Ashcroft]

I would give it a three. I 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.

[Jacob Bourne]

So yeah, yeah, yeah, I also gave it a 3 and I agree with what Lauren just said. I also think that, you know, people do 10 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 then 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 gonna be human oversight too. There's gonna be some type of human accountability, I think ultimately for AI's decision making. Yeah, so I give it a three.

[Rob Rubin]

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 it's broad adoption will actually create new systemic risks.

[Jacob Bourne]

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 is things that aren't obvious.

[Rob Rubin]

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

[Jacob Bourne]

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

[Rob Rubin]

But Lauren, where are you with this one?

[Lauren Ashcroft]

Yeah, I think it's also very likely I gave it a 2 and for the same sameish reasons, I gave it a one too.

[Rob Rubin]

I have to say that I'm pretty sure that, you know, the market has, 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]

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, then what do you do if everybody is relying on this technology?

[Lauren Ashcroft]

That's true, because chatbots have gotten a couple 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 so.

[Rob Rubin]

Well, you know, like broad things. Like it didn't really understand your risk tolerance.

[Lauren Ashcroft]

Yep.

[Rob Rubin]

Right. Like it invested in things that you wouldn't have wanted to invest in because. Or you didn't understand what the risks were.

[Lauren Ashcroft]

Absolutely.

[Jacob Bourne]

Which can happen with a financial advice.

[Rob Rubin]

It can totally happen with a financial advice.

[Jacob Bourne]

But again it's, it's the accountability questions different, it seems.

[Rob Rubin]

Yeah, yeah. 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]

I went with the same score too as the closing the wealth got score for obvious reasons. I think, you know, it certainly could advantage the wealthy because as we see like with OpenAI's, you know, 200 per month plan, well, who can afford that but the wealthy? Right. 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 power, higher power flow systems.

[Rob Rubin]

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

[Lauren Ashcroft]

Yeah, I was approaching it from the direction of what I see it takes for banks to build relationships with like 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. So just in terms of like 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, at the top of that equation.

[Jacob Bourne]

Yeah. Lorna, 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 Ashcroft]

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

Yeah. I mean, I think lower income people probably have high stakes too. They have less money to for sure and lose.

[Rob Rubin]

I took similar approach to you, Jacob, because I think that there's going to be like an arms race for whose models produce the best outcomes and that they're going to. 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 there sort of tiered offerings. So there'd be like 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. Right. Like it's still that high.

[Jacob Bourne]

Touch. 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 further advantage the both of you.

[Lauren Ashcroft]

I can agree with you there.

[Rob Rubin]

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 Ashcroft]

Same. Thank you.

[Jacob Bourne]

Yeah. Thanks for having me.

[Rob Rubin]

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 8, so be sure to check it out. See you then. Bye, guys.

[Lauren Ashcroft]

Bye.