Later life advisers who fail to embrace AI risk missing out on an expected exponential growth in the sector, Air chief executive Will Hale has warned.
Speaking at the Air Evolve Summit earlier this month, Hale urged later life specialists to start looking at how to implement AI into their businesses now.
Hale's comments follow research cited by the FCA suggesting 51% of households aged 60 and over could benefit from accessing housing wealth through later life lending by 2040.
Separate research from the Pensions Commission shows around 15 million people are not saving enough for retirement, meaning many will need to look to the equity in their homes to plug the gap.
However, Air data shows fewer than 2,000 advisers have placed more than one equity release case in the past 12 months, leading to concerns about capacity constraints when the market picks up.
Hale said: "If more advisers start identifying later life lending needs and more customers begin to consider housing wealth as part of their retirement planning, there is a significant opportunity for specialist businesses to grow. But that opportunity only matters if you have the capacity to deal with it and to do so profitably."
He added: "Now is the time to look at how efficiently your business operates, where technology can remove unnecessary work and reduce friction from referral journeys. Because if the market grows in the way we expect, the specialists best placed to benefit will be those that have prepared for it
“We will not meet an exponential increase in demand by asking advisers to work longer hours and simply to handle more cases in the same way. We will need technology that removes friction, processes that stand up to scrutiny and more advisers that understand the value of comprehensive conversations and deep customer relationships."
While many commentators fear that AI will replace vast swathes of the workforce, Hale believes instead that it will allow advisers to thrive.
Hale added: "I don't believe AI means replacing advisers. Indeed, in my opinion, AI could be the catalyst for the advice sector to finally realise its full potential, opening up the ability to engage more customers, increasing accessibility through reducing cost and allowing advisers to differentiate their proposition compared to execution-only and exclusively tech-driven models. Those who embrace AI and commit to embedding it throughout their business and constantly refining its application may well gain a sustainable competitive advantage."
Air’s Evolve Summit brought together financial advisers spanning the specialist later life lending market, mainstream mortgage advisers and generalist IFAs together with practice owners, lenders and other stakeholders from trade bodies and service providers to look at how AI can save time, improve client communication and genuinely add value, as well as where its risks and limitations lie. The event follows the publication of the FCA's Mills Review this summer, which described AI as likely to become a defining force in retail financial services.
