Henry Ford never actually said it —but the quote has stuck: “If I had asked people what they wanted, they would have said faster horses.” It keeps coming to mind when I look at how advice firms are currently using AI.

At a roundtable we hosted for Ortec Finance last week and in our ongoing research, it’s clear that AI is being used to do existing things faster. That is not a criticism. In our IFA DNA report for Fidelity, we confirmed that financial advisers spend only 33% of their time with clients. They want to spend more time with clients. Cutting through admin, compliance, and reporting is a legitimate and valuable goal. If AI helps with that, good.

But there is a gap emerging. Firms that have invested heavily in technology are not yet seeing it translate into new client growth or stronger business performance. The job is getting better but business results aren’t moving. Whether that changes as AI matures, or whether firms need to think more ambitiously about how technology reshapes their proposition, is a question worth sitting with.

At NextWealth Live on 18 March, the host of The Economist’s Boss Class podcast, Andrew Palmer, shared thoughts on how AI is being used in the workplace and what makes humans different. He helped us look beyond “faster horses.”

Retirement advice: building lifetime confidence

Our report on retirement advice with BNY Investments shows that while advisers are adopting AI carefully, the real challenges in retirement planning are behavioural and emotional. Clients underestimate what they need, struggle at the point of transition into retirement, and only start to regain confidence once retirement becomes reality. As inheritance tax changes add another layer of complexity, the opportunity is to use technology to free up time and reinvest it in better conversations when clients need them most

The dust is settling on platforms

Three years ago, we published our first Platform Shakeout report. This year, we changed the name to Platforms After the Shakeout. After a rise of model B platforms, we’re seeing clear trends with different firm types consolidating around distinct models.

Vertically integrated firms are staying with in-house platforms — model B remains the default. PE-backed consolidators also often use a model B platform but with a panel alongside it. For those platforms, the commercial pressure is real: good pricing, reliable service, and strong technical support for complex cases are what it takes to hold those relationships. Planning-led firms continue to prefer a panel of third-party platforms.

Next up: Fee benchmarking

Our latest research on advice fees is nearly ready. The short version: ongoing advice fees are up again, but the full stack — advice, platform, and investment management combined — has held broadly flat. Consumers continue to report that fees feel like good value, though much of that confidence rests on strong portfolio returns. What happens to those perceptions when markets are less kind is a question the industry should be thinking about now. More soon.

Heather

FAQS:

1. How are financial advice firms using AI in 2024 and 2025?

   Most financial advice firms are currently using AI to speed up existing tasks — particularly admin, compliance, and client reporting. Research from NextWealth and Fidelity’s IFA DNA report found that advisers spend only 33% of their time with clients, with the rest consumed by back-office work. AI is being deployed to reduce this burden. However, firms that have invested heavily in technology have not yet seen it translate into measurable new client growth or stronger overall business performance.

2. Why are some advice firms not seeing business growth despite investing in technology?

   A gap is emerging between operational improvement and business outcomes in financial advice. While AI is helping firms work faster, it is primarily being used to do existing things more efficiently rather than to reshape the client proposition or open new markets. This mirrors the “faster horses” problem — optimising for the current model rather than asking what a fundamentally better model might look like. Whether this changes as AI matures, or whether firms need to think more ambitiously, remains an open question for the industry.

3. What are the biggest challenges in providing retirement advice?

   According to NextWealth’s research with BNY Investments, the main challenges in retirement advice are behavioural and emotional rather than technical. Clients tend to underestimate how much they will need, struggle at the point of transitioning into retirement, and only begin to regain confidence once they are actually retired. Inheritance tax changes are adding further complexity. The opportunity for advisers is to use technology to free up time and reinvest it in better, more frequent conversations with clients at critical moments.

4. Are ongoing financial advice fees increasing?

   Yes, ongoing advice fees have risen again according to NextWealth’s latest fee benchmarking research. However, when the full cost stack is considered — advice, platform, and investment management combined — the total has held broadly flat. Consumers currently report that fees feel like fair value, though this perception is closely tied to strong portfolio returns. The industry question is how sentiment around fees may shift if market conditions become less favourable.

5. What is a model B platform in financial services, and which firms use them?

   A model B platform is an in-house investment platform operated by a vertically integrated advice firm, used to keep the full value chain — advice, platform, and investment management — within one organisation. According to NextWealth’s Platforms After the Shakeout report, vertically integrated firms continue to use model B platforms as their default, and PE-backed consolidators often use them too, sometimes alongside a panel of third-party options. Planning-led firms, by contrast, tend to prefer a panel of third-party platforms.