How AI, Bonds and Cybersecurity will impact financial advice in 2024

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After the economic tumult of 2023, financial advisors are eager to head into 2024 as best they can, ready to take on any new challenges that may arise and seize new opportunities that could drive their business success.

The rise of technology, particularly generative artificial intelligencewill continue to be a topic of discussion throughout 2024, as many wealth management leaders become more open to the idea of ​​using these tools in their own practices.

But with big innovation comes big risks, and in the Financial Industry Regulatory Authority’s annual regulatory oversight report, cybersecurity, artificial intelligence and cryptocurrencies are named as the industry’s top concerns and considerations. As new technologies make their mark in finance, Omer Meisel, head of FINRA’s National Roots and Financial Crimes Program, notes that the sector has become the most targeted sector for cyberattacks.

“There has been an increase in the variety, frequency and sophistication of certain cybersecurity incidents, such as ransomware, cyber intrusions at critical vendors used by the financial sector, insider threats and impostor websites” , Meisel said.

LEARN MORE: 9 out of 10 advisors have a positive view of AI, according to an Arizent study

Still, Ornella Bergeron, FINRA’s senior vice president of member supervision, believes AI could be beneficial to all facets of wealth management, provided firms proceed with caution when testing cases of use and their impact.

“So far, companies are very cautious and very thoughtful when considering using AI tools, as well as before deploying new technologies,” Bergeron said. “So while this year’s report didn’t have much in the section on AI in terms of specific roles or observations, this is likely a topic we’ll see a lot more on in the future. ‘future.”

Rajat Deva, head of marketing at Savvy Wealth, echoes this technology will be a key element of finance this year, and has already noticed advisors adopting AI tools to execute automated, hyper-personalized outbound marketing to potential clients.

“Not only does implementing AI allow advisors to quickly identify prospects’ unique needs to use in their outbound messages, but it also provides them with the opportunity to spend more time with actual clients while intelligently developing their practices,” Deva said.

LEARN MORE: 5 Ways Retirement Has Changed in 2023

Beyond new technological tools, 2024 will see more provisions of the Secure 2.0 retirement legislation come into force, impacting both these save for retirement and their employers. These new provisions respond to the challenges that many savers face in preparing for the future, particularly targeting student debt. As part of Secure 2.0, employers now have the option to match a percentage of an employee’s salary student loan payment and direct him to a retirement plan.

“For someone carrying college debt, it can be difficult to decide how to spend an extra dollar when juggling loans and retirement savings,” said Mike Conrath, chief retirement strategist at JPMorgan Asset Management. “Student debt can have a negative impact on the amount a worker saves and accumulates in their retirement nest egg. With Secure 2.0’s new matching provision, employers can prepare their employees to succeed in achieving both of these goals while helping them build a healthier overall financial situation. “.

What else will define 2024 as advisors and businesses strive to leave the chaos of 2023 behind? Check Financial planning‘s latest report on the trends and regulations that will drive success in 2024.