How Financial Advisors Can Use AI to Compete in an Era of Robo Advice

Artificial intelligence has settled into an uncomfortable truth for financial advisors: The tech is neither optional nor transformational on its own. On one hand, independent registered investment advisors (RIAs) have more than doubled their use of AI tools since 2023. Meanwhile, advisors have seen limited benefits from the tools while also feeling threatened from the opposite end by Robo Advice.

When used effectively, AI can make advisory firms more efficient, responsive, and scalable. Used poorly, or ignored entirely, it accelerates the very automation pressures that threaten the advisory business model itself. The technology is neither inherently good nor inherently bad. Its impact depends on whether advisors use AI deliberately to strengthen their role, or allow automation to redefine it for them.

AI as an Efficiency Multiplier, Not an Advice Engine

The clearest and least controversial value of AI for financial advisors is operational efficiency. Advisory firms continue to lose time to tasks that are necessary but not differentiating, including meeting preparation, documentation, follow-up communications, and internal coordination. AI tools are increasingly effective at supporting these workflows by summarizing information, organizing notes, and accelerating routine writing tasks.

When applied correctly, AI reduces friction without reducing responsibility. Advisors remain accountable for recommendations, communication, and compliance, but they spend less time managing systems and more time engaging with clients. This distinction matters because regulators continue to hold advisors fully responsible for outcomes, regardless of whether AI is involved in the process.

This use of AI aligns with broader digital strategy trends in financial services, where technology is expected to support personalization and efficiency without displacing human judgment. DaBrian’s analysis of digital marketing strategies for financial services in 2026 emphasizes the same principle. Technology should amplify expertise, not replace it.

The Real Risk Is Not AI. It Is Undifferentiated Advice

Where AI becomes threatening is not inside the firm, but outside of it. Robo advisors and automated investment platforms continue to improve, especially in areas like portfolio rebalancing, tax optimization, and goal-based planning. For clients with straightforward needs, these tools offer speed, convenience, and low cost.

This is not a hypothetical threat. Assets managed by robo advisors are projected to exceed $2 trillion globally within the next few years, driven largely by younger investors who prioritize digital access and low fees. As these platforms mature, they increasingly encroach on services that were once considered core advisory territory.

The danger for advisors is not that robo advisors are better at advice. It is that they are good enough when advisors fail to clearly articulate and demonstrate their added value. When advisory services are positioned primarily around performance, allocation, or automation-friendly tasks, they become easier to replace.

How Advisors Can Use AI to Compete With Robo Advisors

The most effective way to combat robo advisors is not to reject automation, but to incorporate AI in ways that highlight what automation cannot replicate. AI can help advisors respond faster, communicate more clearly, and anticipate client needs earlier. These capabilities strengthen the human elements of advice rather than weakening them.

For example, AI can help advisors analyze client engagement data to identify moments when outreach is most valuable, such as during market volatility or life transitions. It can assist in crafting clearer educational content that explains complex concepts in plain language. It can also support segmentation and personalization efforts that make communication feel timely and relevant.

These applications do not turn advisors into robots. They allow advisors to deliver a level of responsiveness and clarity that clients increasingly expect from digital experiences, without sacrificing trust or accountability. This is where AI becomes a defensive strategy as much as an efficiency tool.

Compliance and Trust = Competitive Advantage

Automation threatens advisors most when firms underestimate the importance of governance and trust. Robo advisors operate within narrow parameters, but human advisors operate within regulatory frameworks that demand oversight, documentation, and accountability. This is often framed as a burden, but it is also a differentiator.

Regulators are paying closer attention to how AI is used in financial services, particularly around transparency and consumer protection. A recent Reuters report on regulatory reviews of AI in retail finance highlights the growing expectation that firms understand and control how AI influences client outcomes.

Advisors who treat compliance as part of their value proposition, rather than a back office function, can position themselves as safer, more accountable partners than automated platforms. AI should operate within those guardrails, supporting advisors without bypassing review or judgment.

Using AI to Strengthen Marketing & Positioning

AI also plays a critical role in how advisory firms position themselves in a crowded market. Advisors who rely on generic messaging risk blending into a landscape increasingly dominated by automated solutions. AI can help firms analyze which messages resonate, which questions prospects ask most often, and where gaps exist in their content strategy.

When paired with a structured digital marketing approach, AI supports more consistent, relevant, and compliant communication. DaBrian’s financial services digital marketing services focus on building visibility and trust without sacrificing regulatory discipline. AI can accelerate execution, but strategy remains the driver.

A More Sustainable Way Forward

In 2026, AI will continue to advance whether advisory firms embrace it or not. The firms that thrive will be those that use AI to reduce friction, sharpen communication, and reinforce the advisor’s role as a trusted decision partner. The firms that struggle will be those that allow automation to define their value for them.

AI does not eliminate the need for advisors. It raises the bar for what advisors must deliver. Those who respond intentionally can use the same technology that threatens commoditization to protect and strengthen their business.