Advisors expect AI will augment their business

Artificial intelligence (AI) is everywhere these days, seemingly touching every industry, market segment and occupation. In 2025 alone, global AI spending is expected to hit $375 billion, with that figure rising to $500 billion in 2026, according to a report by UBS.

Little wonder, then, that in the latest edition of the Federated Hermes RIA and Independent Advisor Study, AI was one of the dominant themes, with respondents citing the emergence of new technologies in client engagement as one of the key things that are top of mind right now.

The survey, which Federated Hermes has conducted for five years, polled 271 US advisors overseeing at least $300 million in client portfolios. The aim was to provide a comprehensive quantitative and qualitative analysis of the views of this important segment of the market. This year’s research yielded some key developments in business building and practice management trends. As often is the case these days, AI was at the center.

In each survey, we ask the quintessential “What keeps you up at night?” question, and respondents consistently name growing their business and acquiring client assets as primary concerns. This year, they indicated the importance of attracting younger clients and better using technology to create meaningful engagement, with registered investment advisors (RIAs) naming the latter as their second-highest issue.

We also polled advisors on what specific actions they took in the past year to address their business concerns. We gave respondents a list of potential actions (as well as a write-in response) but limited them to a single top action. Nearly one quarter (23%) asked for referrals — a tried-and-true strategy for contacting friends, family and colleagues of existing clients. One-in-five (20%) focused on client communication, especially through value-add content such as newsletters and quarterly portfolio updates. Conversely, few respondents (3% or less) had a technology-enabled primary business-building action, such as increasing their digital and social media footprint or integrating AI for more routine tasks to free up time for clients and prospects.

It would be no surprise if this lack of emphasis on technological solutions were to change. A majority of advisors in our study are part of a team, rather than a solo practitioner. Of those, seven of 10 reported making more efficient use of technology as the top way they improved their team. Advisory firms are implementing AI in their workflows, mainly, as our study found, to help increase business efficiency and free advisors from rote tasks.

Indeed, while advisor adoption of AI is low for now, study respondents are clearly hungry for information. RIAs who sat for anonymous interviews discussed both the positives (e.g., efficiency) and the negatives (e.g., mistakes or compliance concerns) of AI. Some described “demos” of tools they conducted for tasks, such as client meeting transcription, meeting summaries, content creation, client communication and investment analysis. Of course, regulatory compliance standards tend to take time to catch up with technology. In an environment in which advisors emphasize prompt and quality client communication, respondents noted returning phone calls or emails and increased frequency of client meetings (virtual or in-person) and not digital or social media content.

Our view is that, though the “human touch” will long continue its reign in financial advisory, using digital automation for business building and client engagement will likely gain momentum. A 2025 report from EY noted 52% of existing Millennial wealth clients worldwide trust AI as much or more than a human. Advisors may need to adapt their value proposition for this new world if they want to be a part of the coming generational wealth transfer.

The 2025 Federated Hermes RIA and Independent Advisor Study is an anonymous, online survey of a respondent panel provided by OpinionRoute, LLC, was fielded between May 28, 2025, and June 16, 2025. The survey had a margin of error of +/- 5% at a 95% confidence level. Advisor respondents included fee- based registered investment advisors (RIAs), independents, dually registered or hybrid advisors, and private client or wealth management advisors. A majority of respondents represented firms with between $300M and $999 million in assets under management and client/household relationships between $25 million and $249 million. The study is augmented by 10 anonymous interviews with survey respondents selected by the vendor.