Roles in the financial planning profession have always been molded in dialogue with the technology available; with each generation comes the expansion and compression of different opportunities. Today, much of the enthusiasm around artificial intelligence (AI) centers on its ability to automate non-client-facing work, theoretically enabling advisors to spend a greater percentage of their time in meetings. However, this vision quickly faces practical and human limitations.
In this 190th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the tradeoffs between the emotionally intensive work of financial planning and the automative promises of artificial intelligence. For example, one of the promises of AI is that it allows advisors to have more client-facing time… but what is the upper limit of that effect? Increasing client-facing time from roughly 25–30% to significantly higher levels may not be desirable – or even sustainable – for many advisors. Beyond a certain point, more meetings do not equate to better outcomes, as the quality of advice and the advisor’s own well-being can deteriorate. In this context, optimizing for maximum efficiency risks pushing the profession toward an “assembly line” model that is poorly suited to relationship-driven, high-empathy work.
On the other hand, financial advisors have increasingly turned to AI as a potential solution to the industry’s widely discussed “talent shortage”, with the expectation that greater efficiency will allow firms to serve more clients at a lower cost. Yet this framing assumes that the core constraint is advisor capacity, rather than questioning whether the real issue lies in how advisors are trained, developed, and deployed. As firms rush to automate back- and middle-office functions, a deeper tension emerges: the same tools that promise to expand capacity may inadvertently undermine the very human capital pipeline the profession depends on.
At the same time, the push for efficiency raises critical concerns about the long-term development of talent. Entry-level roles – often responsible for the operational and analytical tasks AI seeks to replace – have traditionally served as the training ground for future advisors. Eliminating these positions in pursuit of short-term productivity gains may hollow out firms’ ability to cultivate experienced professionals over time. The result could be a paradox: firms solve for immediate capacity constraints while exacerbating future talent shortages by failing to invest in the next generation. This dynamic is already evident in hiring patterns that heavily favor experienced advisors, despite a lack of willingness to train newcomers internally.
Compounding this challenge is the nature of AI itself, which often performs best when paired with experienced practitioners who can validate and refine its outputs. While AI can generate recommendations or streamline analysis, it is not infallible. Advisors who have developed judgment through hands-on experience are better equipped to identify errors, contextualize advice, and apply nuanced decision-making. If future advisors are trained primarily through AI-assisted workflows without building foundational expertise, their ability to critically evaluate these tools may diminish. Over time, this could lead to a degradation of professional judgment and an increased risk of systemic errors that go unnoticed and compound.
Ultimately, the key issue is not whether AI can improve efficiency – it clearly can – but determining what firms are actually trying to optimize for. If the goal is short-term productivity or preparing a practice for sale, maximizing efficiency may be rational. However, for firms seeking to build enduring businesses, a more balanced approach is required – one that leverages AI to enhance, rather than replace, human development. By using technology to support training, deepen expertise, and expand advisor capabilities (instead of eliminating formative experiences), firms can position themselves to both serve more clients and cultivate the skilled professionals needed for long-term success.
