Should AI Replace Your Financial Advisor?

If you find AI threatening, you’re not alone. It is becoming increasingly more difficult to tell what’s real and what’s fake, and whole professions are being upended, including, quite possibly, financial advising.

We decided to confront the question head-on: Should – and will – AI replace your financial advisor?

A 2025 survey conducted by Advisor360° with 300 U.S.-based financial advisors at wealth management firms found that 85% of advisors view Gen AI as helpful. Rather than a threat to their jobs, most financial advisors are using AI as a tool to help them do their jobs better. Only 8% of those surveyed by Advisor360° believe Gen AI is a potential threat to their livelihood—that’s a dramatic change from just a year ago, when 21% of advisors surveyed saw AI as a threat.

Serving Clients Better Without Dehumanizing the Relationship

According to Advisor360°, financial advisors welcome AI tools to make their work more efficient without depersonalizing client relationships. Financial advisors use Gen AI to help with marketing, manage emails, and summarize meeting notes. They are far less likely to use it to help develop personalized financial plans, according to the Advisor360° survey. This is partly due to compliance concerns, so if we can overcome those compliance hurdles, can we replace advisors with AI?

Here are some things to consider:

What are you looking for in an advisor? 

If you are only looking for advice about investing and do not care to discuss how that affects all the other aspects of your financial life (i.e. paying off student loans, staying the course when markets get rough, whether you can afford that vacation house or career change, minimizing taxes on your investments, and strategies to draw down your savings in retirement, to name just a few) Gen AI might be a decent substitute for a human advisor.

Human advisors care about you. 

If you’ve ever had a “conversation” with an AI chatbot, you most likely realized that despite its impressive knowledge, there is something hollow about the responses it gives, even when it uses statements that refer to your feelings (like, “I can see why this would be upsetting…”). That’s because you interact with an algorithm trained to sound like a human being, but not a real person who cares about meeting your needs. That may not matter to you! But keep this in mind: human advisors truly want to provide personalized, quality advice because they have a stake in cultivating long-term client relationships, and most take pride in helping people improve their lives. They also want to build and protect their reputations. An AI chatbot does not care about you (it can seem caring because it has been trained that way, but AI is electricity, algorithms, and data). AI will be available if you wake up in the middle of the night, worried about your investment portfolio. Still, if you’re hoping for personalized guidance or thoughtful advice, you’ll probably be disappointed.

Gen AI hallucinates. 

AI can sometimes make up facts or cite fake research. You don't want incorrect information in your financial plan or advice. Human advisors aren't perfect either (that's why choosing one carefully is essential), but Gen AI can confidently sound correct when it's wrong.

Using AI the wrong way raises privacy issues.

Anything uploaded into a public AI tool like ChatGPT, Perplexity, or Google’s Gemini could be used to improve that AI, unless you’re on a paid plan with privacy controls. Some advisors use public tools, while others use paid tools with better privacy. Ideally, advisors use paid tools to keep client data private. Perhaps that doesn’t bother you, but think about this. We asked two well-known Gen AI platforms for information about a specific person, only giving the name and city. One platform declined, stating it does not provide information on private individuals (public figures are a different story). The other generated a profile using public information, but the content was outdated, one fact was wrong, and the photo was of someone else.

What AI Does Well

AI tools, including robo-advisors, can help with simple tasks like organizing investment accounts, scheduling meetings, responding to general questions, offering basic recommendations, doing simple financial calculations, and screening investments. However, full compliance and sophisticated risk management still need human involvement.

Where AI Falls Short

• Understanding each client’s unique situation: AI can’t fully grasp the nuances of individual needs

• Handling complex high-net-worth planning: Strategies like estate planning, tax optimization, and business succession are best left to humans

• Building trust: Genuine trust comes from human relationships

• Managing emotional financial decisions: Money involves emotions, which AI can’t truly understand

• Collaborating with professionals: AI struggles to coordinate complex plans with a team of human experts such as attorneys, CPAs, business brokers, and so on
  

The Future of AI in Financial Services

Most people who hire a financial advisor need guidance and support to create, adjust, and follow a financial plan. This makes it unlikely that AI will fully replace human advisors anytime soon. Instead of asking if AI should replace your financial advisor, a better question is, “How should your financial advisor use AI?” The best financial planning experience combines human judgment with AI’s capabilities. AI can help, but financial advising is personal and complex, so human interaction remains essential. The advisor’s role may shift to focus more on relationships, strategy, and solving complex problems, which we welcome.

Some Questions to Ask Your Advisors About How They Use AI in Their Work

AI offers tremendous potential to financial advisors, but it is important to make sure you understand their policies by asking questions. Here are a few to consider:

• Could you explain how your firm uses AI in its processes?

• If you use an AI chatbot to answer my questions, what security measures (such as two-factor authentication) are in place to ensure the questions and answers are handled securely? Are the conversations stored for future use by the AI tool?

• If your AI tool makes investment or asset allocation recommendations, do you personally review each one before implementing them?

• How can you determine when an AI response to a question includes a hallucination or confuses the facts?

• Does your AI chatbot have compatibility problems in terms of integrating with your other systems (that would reduce operational inefficiencies and could require the same data to be stored in multiple places, increasing cybersecurity risks)?
  

These questions aren’t meant to scare or create doubt. Instead, they help you understand your advisor’s approach and ensure your data and decisions remain safe and sound.

At Gold Medal Waters, serving our clients means going beyond traditional advice. We use AI thoughtfully and responsibly, ensuring your data and personal goals are protected. We're a fee-only financial advisor dedicated to helping you reach your financial goals based on your unique needs and what you value most. Book a free, initial consultation to learn more!

Disclosure: Advisory Services are offered through Gold Medal Waters, a Registered Investment Advisor. This post and material presented are for informational and illustrative purposes only, and do not constitute investment advice and is not intended as an endorsement of any specific investment. As such, this material is not client-specific, we make adjustments in individual portfolios based on each client's financial plan, income needs, risk tolerance and total asset allocation. Interactive checklists are made available to you as self-help tools for your independent use and are not intended to provide investment advice. While Gold Medal Waters believes information derived from third-party sources to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability in regard to your individual circumstances.  Investors should carefully consider the investment objectives, risks, charges, and expenses associated with any investment. The information discussed is not intended to render tax or legal advice. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.  Investing involves risk including the potential loss of principal, and unless otherwise stated, are not guaranteed. Past performance does not guarantee future results. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Consult your financial professional before making any investment decision.