Explore the evolving role of financial advisers in the age of AI. This article discusses how AI can enhance financial advice rather than replace human advisers, highlighting the importance of empathy and understanding in client relationships.
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Only about 9% of South African households consult a financial adviser. At the same time, South Africans are underinsured by at least R2.4 million per income earner, and financial literacy remains stubbornly low compared to global figures – even in high-income households.
Against this backdrop, the question is not whether AI will replace advisers. The question is whether advisers can afford not to use it if they are to bring financial education and better advice to more people. AI will not replace the financial adviser, but it will transform the role.
From threat to tool
Much of the public debate frames AI as a job killer. In advice businesses, this fear is understandable. Onboarding, compliance, portfolio monitoring, and reporting are already being automated. Rebalancing models can run in seconds. Digital underwriting engines can estimate life expectancy based on actuarial data and adjust retirement projections in real time.
This shift should be welcomed, because routine and analytical tasks are precisely where machines outperform humans. They are consistent. They do not tire. They process vast datasets without error.
Often, highly trained people do robotic work, but are expected to instantly switch to empathy when a client calls. But when AI takes over the robotic work, it frees advisers up to focus on strategic decisions and deeper engagement.
The risk of blind automation
Yet the adoption of AI is not without danger. Biased algorithms can skew product recommendations. If data is incomplete or unbalanced, outcomes may unintentionally favour certain groups or providers. In financial services, this has direct implications for fairness and trust.
Any perceived unfairness can push a client away. And the brokerage is accountable. The AI does not carry the liability.
Global regulators are sharpening their focus. The EU AI Act classifies many financial AI applications as high risk. It requires strong governance frameworks, human oversight, and demonstrable controls. Even outside Europe, regulators and insurers increasingly expect firms to prove responsible AI governance, not just compliance on paper.
For South African advisers, the message is clear: efficiency gains cannot come at the expense of transparency. Advisers must understand how their models work, interrogate outputs, and document oversight. Ethical risk is business risk.
A hybrid future
If AI excels at pattern recognition, advisers excel at pattern meaning. Retirement planning illustrates this distinction, with research showing that loneliness in retirement can increase the risk of premature death even more than smoking 15 cigarettes a day would do. No algorithm can fully capture the emotional weight of this statistic in a conversation with a client.
Financial advice is fundamentally human. Clients face emotional decisions and personal complexities where purely data-driven guidance is not enough.
This is particularly relevant for younger clients. Gen Z consumers are comfortable with apps and digital tools. They expect speed, accessibility, and personalisation, and they will not engage with clunky processes.
But this digital fluency does not equal financial wisdom. In a country with low literacy and deep inequality, the adviser’s role as behavioural coach becomes even more important.
Building advice businesses that last
The opportunity lies in redesigning advisory operating models. This means embedding AI into workflows, investing in governance, and learning to interpret machine-generated insights. While AI can surface data, highlight that a client’s projected longevity has increased, and flag spending anomalies or underinsurance gaps, it cannot sit across the table and ask what will give a client purpose and dignity in later life.
Humans will always want connection and empathy. When the stakes are high, they want a relationship. They want someone who understands their context and is accountable. In a country where millions still navigate complex financial decisions alone, the need for trusted, capable advisers has never been greater. As Louis-Neil Korsten of Spock.ai said: “AI will not take people’s jobs, but people who use AI will”.
* De Witt is the head of financial planning at NMG Benefits.
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