Customer due diligence requirements, the anticipated COFI implementation, Omni-RR developments, rising cybersecurity expectations and the broader burden of regulatory compliance are no longer abstract boardroom issues.
For smaller financial planning businesses, these requirements sit directly on the desk of the advisor, who is also expected to service clients, manage staff, grow the business and remain commercially sustainable. For large institutions, these pressures are absorbed through legal teams, compliance departments, IT specialists and operational budgets. For the smaller advisory business, however, the cumulative burden is overwhelming.
The natural response may be to see technology, particularly AI, as yet another disruption to understand, manage and regulate. But that may be the wrong lens. The very pressure that is making it more difficult to run a small advice business is forcing us to rethink how these businesses are structured. If used correctly, AI may become one of the most powerful enablers available to the smaller advice business.
The most important area is systems and processes. Many advisory businesses have processes that developed organically over time. They may work, but they are often undocumented, inconsistent and inefficient. AI can assist a small business owner not only to map the full client journey, but also to review it critically from start to finish.
It helps identify duplication, unnecessary steps, gaps in responsibility and opportunities to create smarter workflows, while building automations to replace mundane tasks that consume valuable time.
Many smaller firms struggle to maintain consistent communication. AI helps draft newsletters, meeting summaries, client education pieces and event invitations. A practical example would be asking AI to turn a complex topic such as retirement income planning, beneficiary nominations or tax year-end planning into a plain language client article. The advisor must still review the content, but the time saved in creating a first draft is significant.
Compliance is another area where AI adds meaningful support. It summarises legislation, creates compliance calendars, drafts internal policy documents and compares client communication against a required disclosure checklist. Importantly, AI should not be treated as the compliance officer or legal advisor.
Financial management is often overlooked. AI can assist business owners to analyse revenue streams, segment clients, identify unprofitable service models or build simple budgets. For example, an advisor can use AI to assess whether certain client segments are receiving a level of service that is not aligned with the fees being charged. That kind of insight supports better pricing, improved service models and a more sustainable business.
None of this means advisors should blindly adopt every AI tool available. Client confidentiality, data security, accuracy and professional judgement remain non-negotiable. AI should be used as an assistant, not as the advisor. The businesses that benefit most will be those that first understand their processes, then apply AI to strengthen them.
Peter Nolan, Anthropic’s head of asset and wealth management, recently made the point that AI is not being developed to replace financial advisors, but to empower them. His reasoning is important: AI may be able to analyse portfolios, assist with planning and automate workflows, but it cannot build trust through human connection, understand family dynamics in the way an experienced advisor can or sit with a client through fear, loss or market panic.
This is the real opportunity. AI should improve the quality of our work and free advisors from the administrative tasks that too often keep them away from clients. If human judgement, empathy and trust remain central to advice, then human experience also remains central to the development of new advisors.
The next generation will not be shaped by technology alone. They will need to learn from professionals who have built trust, guided clients through uncertainty and proven over time what good advice looks like in practice.
Technology may accelerate knowledge, but experience turns that knowledge into wisdom. For smaller FSPs, that is where AI helps level the playing field: not by replacing the human advisor, but by giving them time to be one.
