Avoid These 3 Pitfalls When Using Generative AI in Client Communications

The excitement (or hype, depending on whom you ask) over generative artificial intelligence shows no signs of abating soon—and neither do the related concerns of investors.

Although generative AI’s future potential seems unlimited, many people are also reacting negatively to its use, particularly when it comes to financial advising.

In other words, though there are numerous tasks that generative AI can help streamline, it can also alienate clients who are seeking more human attention (not robot) in their advice journey. One recurring theme is their attitudes toward the use of generative AI for client communications, whether that be meeting summaries, follow-ups, client inquiries, or other personalized emails.

Although generative AI can certainly save advisors time when it comes to client communications, research points to a few mistakes that can give individual investors “the ick” and advisors should be careful to avoid.

1. Using generative AI to create personalized communications.

In our research, we found that investors reacted negatively to generative AI assisting with personalized communications.

We assessed a scenario where an advisor used generative AI to write a personalized email wishing them well on their upcoming vacation. Investors noted that such a use by advisors felt insincere and gave them “the impression that they are just ticking a box and don’t really care.”

These results suggest that generative AI may not be a good tool to use for building personal relationships with clients. When it comes to communications whose purpose is to show an advisor’s understanding or genuine care of a client, human-driven messaging is still the gold standard.

2. Not editing out AI slop.

Not all content from generative AI is created equal. Although in some cases, it’s increasingly harder to spot generated content, there are other instances where it’s glaringly obvious. There is even a term for this content: “AI slop”—low-quality AI-generated content.

This means that it’s essential to review every form of generative AI client communications before sending it out. Even examples as inoffensive as meeting summaries may be littered with errors or general wordiness that can bury key points. In other words, though generative AI can provide a first draft, advisors should recognize that it’s just that: a first draft.

3. Using generative AI to create shortcuts on relationship-building activities.

It’s important to understand the role of generative AI in financial advising: It’s not a tool that can save advisors time and effort on anything. Instead, generative AI is a tool that can save advisors time and effort only on menial tasks, so that they can devote more time to activities only human advisors can do, like relationship building and communication.

Sure, an advisor can add a generative AI chatbot on their website to answer client questions. For basic issues like helping a client reset their password, this may be a good choice.

But consider if the client is asking a meatier question, like “What is a 529 plan, and do I need one?” In that case, having a chatbot send them a link to an article on 529 plans may not be as helpful and may even make them reconsider their relationship with the advisor.

Wrapping Up

When thinking about how to incorporate generative AI into your practice, don’t forget to consider the client’s experience and perspective.

Clients don’t want to muddle through the verbosity of AI slop. They’re seeking a human financial advisor for a reason and may be turned off by having a chatbot handle the bulk of their questions.

While generative AI may be a great tool for creating first drafts of routine client communications or summarizing meeting notes, there is no shortcut for relationship building.