Research by Downing Fund Managers reveals that AI is expected to have a greater impact on advisory business than ESG over the next five years.
Nearly half (46%) of advisors surveyed believe AI will drive efficiency, improve personalized insights, and support automation and analytics.
This compares to 28% who see ESG investing, which is gaining attention from investors and regulators, as the most impactful trend.
Meanwhile, just over a fifth (22%) believe regulatory changes aimed at transparency, cost reduction and customer protection will significantly shape the sector.
Only 9% of advisors see the growth of fintech and passive investing as key drivers of future change, while just 7% expect alternative investments and private markets to play the most important role.
Simon Evan-Cook, manager of the Downing Fox fund of funds range, said: “It’s fascinating to see how quickly AI has become a major issue for advisers. It’s not hard to imagine how this might work in their world, including helping to fill the guidance gap.
“It also indicates that advisors are concerned about growing competition from AI, and we believe here that good active products like Downing Fox will help differentiate human advisors from the next wave of robo advisors.”
The VT Downing Fox Funds range consists of four funds of funds.
Each portfolio differs based on its exposure to equities or “growth,” allowing advisors to recommend the option they believe is best for their client.
