Wealth management has got junior advisors’ first 90 days covered. What happens on day 91?

Ask any wealth management firm what a new advisor recruit can expect in the first 90 days, and you’ll likely get a tidy answer that includes compliance training, licensing paperwork and an introduction to the team. Ask what happens after that in the age of AI, the answers get murky.

Processing Content

Day 91 once marked the start of a traditional six-to-eight-year stretch during which junior advisors learned on the job, performing “grunt work” like researching client questions, drafting emails and prepping meeting notes before going to build their books of business. 

Artificial intelligence is now sophisticated enough to do as much or as little of that work a firm desires, leaving them to decide where new advisors should concentrate their efforts while ensuring they master the basics of their profession.

READ MORE: Raymond James on track to top advisor recruiting record, CEO says

What junior advisors used to learn by doing

The clock is ticking. New advisors entering the industry bring a greater awareness of AI tools, alongside anxiety about what it means for their jobs. A recent report by the consultancy firm FP Transitions and the Finserv Foundation found that among next-generation advisors, 47% feared job displacement due to AI implementation, while 64% expressed concern about overreliance on automation or a loss of human interaction. 

In the past, tasks like setting up a 529 plan taught new advisors the business. From the initial research to the finished pitch to clients, the steps involved served as the necessary “reps” for junior advisors. 

“The junior team member learned about 529s,” said John O’Connell, founder and chief executive officer of the Oasis Group. “They learned the value of them. They put together the email. They got that to the [senior] advisor, who approved it, and then it went through.”

Letting an AI tool do the job saves time but also “really does take away some of that learning experience,” O’Connell said. “All that goes away if artificial intelligence can simply write the email.”

Young advisors may miss out on the learning

Whether this new efficiency is good or bad for advisors looking to build their book of business depends on who you ask. Technology can now eliminate years of sitting in meetings and repetitive tasks before going out in the field, said Dan Daum, founder and chief executive officer of WealthStream, a firm that assists financial services with AI. That means young advisors “can now be experts in all of these areas from day one. If you’re a smart, capable person, you’re not going to wait around for a decade to feel productive.” 

Yet, AI systems that do the work once reserved for beginners might “unintentionally remove the developmental experiences that help young professionals become advisors in the first place,” said  FP Transitions vice president of marketing Elise Rogers in a press release.

Even so, the industry still needs concrete pathways for young advisors to “learn, make mistakes, build judgment and develop client relationships,” Rogers said.

O’Connell isn’t so sure firms have figured out how to crack the junior advisor-AI equation. “How are firms going to train new staff members as they come into the business,” he said. “And how are they going to accelerate that, based on the rate of change we’re seeing with these technologies?” 

READ MORE: HSBC Wealth survey shows AI losing out to humans in key areas

AI use policy for new recruits

Firms must also grapple with young advisors’ comfort level with AI tools when it comes to recruiting talent. In an FP Transitions survey, 73% of advisors said it was at least moderately important for their prospective employers to prioritize AI adoption over the next three years and provide training in AI tools and technology. 

For firms that increasingly use AI to handle entry-level workflows, O’Connell suggests creating an AI acceptable-use policy for new recruits before they cross the threshold.

In addition to a list of approved tools, “you’ve also got to give them really good guardrails,” he said. That includes the firm’s policy on when it’s acceptable and unacceptable to use AI. For example, “if you’re a firm that prides itself on financial planning, then you don’t want AI doing any of your financial planning,” O’Connell said.

Firms can also run an audit on which specific tasks will be eliminated or reduced by AI, and how that will reshape the onboarding process and other phases of work.  “That could be some initial investment management or research around investment options for clients,” said O’Connell. “Take that and figure out what that means for the training program.”

Removing the tasks also means replacing them with more meaningful ones, according to Daum. In this instance, coaching will go a long way. “Coach [new recruits] on the human side of advice,” he said. No matter what AI systems are implemented, the human element of financial advice is what draws most young talent to the job. That’s something junior advisors will use long after day 91.