How to blend AI with emotional intelligence to enhance client relationships 

Artificial intelligence (AI), the breakthrough technology with the power to improve operational efficiencies by performing tasks normally done by humans, could be a game changer for financial advisors. But they have yet to fully embrace it. In fact, six out of ten (61%) financial firms are not using AI at all, according to Gartner.¹ The top reasons cited for not using AI include having other priorities, a lack of technical skills, low-quality data, and insufficient use cases. 

The good news for financial advisors? Machines can’t raise the bar on their own. The winning formula is blending the productivity-saving and data-crunching strengths of AI with the intangible emotional intelligence (EI) perspectives that only humans can bring to the advisor/client relationship. Psychologist Daniel Goleman, author of “Emotional Intelligence,” defines EI as the ability to identify, assess, and control one’s emotions, and the emotions of others. The author emphasizes that as much as 80% of adult success comes from EQ, a measure of a person’s emotional intelligence, not IQ. 

AI, on the other hand, is a powerful time-saving productivity tool to lean into to solve a vexing problem: nearly one-third of financial advisors say they do not have enough time to spend with clients, according to a J.D. Power study.² AI allows advisors to avoid repetitive, time-consuming tasks, freeing up valuable face time with clients.  

AI is already transforming the way financial advisors and asset managers make investment decisions and construct portfolios. But one of the greatest benefits of leveraging AI is the boost it gives to day-to-day productivity and efficiency.  

AI is a time-saver that can enable advisors to spend less time on non-client facing tasks and more quality time on one-to-one client interactions. The typical financial advisor, according to a Kitces Research study, spends only about half of their time on direct client-related tasks, and just 17% of their time meeting with clients.³ By teaming up with machines, advisors can focus on their most important job requirement: delivering a more meaningful advisor/client experience. 

A winning strategy for advisors is to use AI as a complementary tool to enhance the power of EI traits they provide, such as listening with purpose, building trust, showing empathy, and capitalizing on self- and social awareness that builds greater understanding of clients. With the help of AI tools, advisors can reduce the time they spend prospecting for clients, doing administrative back-office work, and prepping for client meetings. And as a result, they can spend more time getting to know their client’s financial situation better, advising on how to build wealth, and doing a deeper, more personalized dive into their financial dreams, goals, and the obstacles they face. 

The time-saving power of AI-powered automation tools is as valuable to a financial advisor as algorithms that determine the optimal portfolio asset allocation or whether a retiree’s money will run out. 

Here’s some of what AI can bring to the table: 

• Enhances client communications with timely, personalized content. Getting key information to clients in the right format, at the right time, and in a personalized way is an AI strength. And personalization is what clients crave today. AI tools can help pinpoint when to send planning-related messages to spur clients to action, such as when clients are transitioning into a new life phase when having a child, entering retirement, or buying a home. AI can also help by quickly sharing time-sensitive financial news, such as a Federal Reserve rate cut or stock market decline. A nicely designed newsletter or timely email message that’s tailored to the client’s situation can go a long way toward enhancing client loyalty.    
• Provides editorial and messaging assistance. AI can be used to draft and polish client emails, newsletters, and blog copy. It can also assist in delivering messages on social media with AI-powered copywriters, social media caption generators, and SEO optimization tools.  
• Drives more efficient data analyses and meeting preparation. AI tools can crunch the numbers and produce easy-to-understand presentations with accompanying graphs and charts that highlight the client’s retirement readiness, asset mix, and liquidity needs. 
• Optimizes new client prospecting outreach. AI search tools can target potential clients in a more time-efficient manner by identifying leads from social media and third-party vendors. Some AI tools filter potential clients by “catalyst events,” such as receiving a recent inheritance or buying a new house, as well as through identifying key insights, such as net worth, salary, and occupation. 
• Simplifies meeting notes. AI can take notes and summarize the key takeaways from client meetings and prompt follow-up at the opportune time. There are also AI tools that can assist in keeping current with compliance-related issues.   

AI is a complement to what EI brings to the table. Machines can’t read an anxious client's body language, validate how a client feels, or recognize behavioral roadblocks that are interfering with the execution of their financial plan. EI helps to better connect with clients by listening with purpose, demonstrating empathy, and asking thoughtful questions. 

The benefits of incorporating AI is apparent. But it’s the synergy between AI and EI that can enhance your services and help you maintain a competitive edge in today’s increasingly digital landscape. Let the AI-driven machines do the behind-the-scenes administrative work, freeing up precious time to get to know your clients better, which can both enhance and cement a lasting client relationship.