I met Richard and Wayne a couple of weeks ago.
They run a well-regarded financial advice firm in Sydney’s Hills district. Ten people. Strong reputation. Good enquiry flow. Long enough in the game to have survived a few industry upheavals.
They couldn’t wait to tell me about their AI strategy.
And here’s the thing — before they’d finished their first sentence, I already knew what the strategy was going to be.
Map the workflows. Identify the tasks that are eating up too much team time. Replace some with AI agents. Offshore the rest. Get more efficient. Costs down. Margins up.
The future, sorted.
Except it isn’t.
EFFICIENCY v EFFECTIVENESS
Becoming more efficient is different from becoming more effective.
I asked Richard and Wayne what they planned to do with their efficiency gains. If AI agents are handling the low-value tasks, what does the team do with the time freed up?
Their answer: serve more clients. Do what they’ve always done, just more of it.
That’s not a strategy. That’s AI housekeeping.
And optimising what a firm currently does, rather than what it will need to do to compete and thrive, is a slippery and steep path. Rapid, broad disruption — the kind AI is already producing — generates predictable consequences for firms that aren’t asking the right questions. Anxiety. Reactive decisions. A creeping sense that staying busy is the same as staying relevant.
Richard and Wayne are not unusual.
This conversation is happening across the industry right now. Smart principals making rational short-term decisions that leave them more exposed in the medium term, not less.
AI ADVICE
Here’s what most advice principals haven’t yet sat with long enough.
AI isn’t coming for the administrative underbelly of advice firms.
It’s coming for the advice itself.
The research.
The modelling.
The scenario planning.
The products.
The tax returns.
The asset allocations.
The structures.
The recommendations.
Everything except the personalities.
These are the parts senior advisers currently do and are well paid to do.
Their work is next.
It is coming.
And when it arrives, “we worked really hard to automate our back office” will be roughly as useful as saying you reorganised your filing system the week before the flood.
AI accelerates whatever an advice firm already is.
If advice value is clear, detailed, team-based, and genuinely hard to replicate, AI will improve it.
If value is adviser-dependent and delivered by increasingly busy support teams constantly striving to optimise, AI will expose that.
Fast.
MARGIN COMPRESSION
The margin compression will at first be slow. Then, near the end, irreversible.
Efficiency without a better means of delivering greater client value isn’t a competitive advantage. It’s a faster route to commoditisation.
The firms that will come through this well are doing something harder right now. They’re asking what their clients are genuinely paying for — not in the brochure sense, but in the real sense. They’re building teams who deeply understand, engage and manage what clients value. They’re developing those skills deliberately, urgently, now — before AI makes the window smaller.
That work is different. It’s effective. And it can’t be replicated by AI agents or offshored to a team that’s never met the client.
Richard and Wayne aren’t ready for that conversation yet.
They’re too focused on the AI projects they’re already having.
The question for firms isn’t whether to use AI.
It’s whether they will still have something worth accelerating when the wave arrives.
Jim
Photo Credit: CANVA_photos_MAD81y-alO0