Microsoft research predicts AI will replace financial advisors and here are my 10 reasons why that won’t happen anytime soon

Last week, Microsoft published a research paper exploring how Gen. AI could impact different professions. It highlights the top 40 occupations with the highest AI applicability scores.

"Personal Financial Advisors" made the top 30.

Link to the full report: Working with AI: Measuring the Occupational Implications of Generative AI

Reading through this research report gave me a bit of an existential crisis. Seeing my own profession with a high AI applicability score triggered that “wait, am I becoming obsolete?” kind of feeling. Having said that, I believe the report is designed to push the boundaries of what's technically possible, not necessarily what's practically valuable to real people.

Based on the data of 200,000 anonymized conversations between users and Microsoft Copilot, authors of the paper measures AI applicability using a metric called the AI Applicability Score, which combines two key factors:

1. Coverage: how well AI understands the task based on a job’s real world descriptions. They test this by prompting AI with real examples from occupational databases and seeing if it can generate relevant responses.

2. Quality of Completion: how well AI can complete the task when asked to do so. Human experts (including professionals like CFPs) then rate the AI’s responses for accuracy, relevance, and helpfulness.

The final score is a weighted average of these two. High scores mean AI not only understands the job well, but also performs it at or above human level quality (at least in some isolated test cases).

The authors admit two limitations to their analysis:

1. "we are only able to analyze the data from one widely used, publicly available LLM"

2. "decomposing an occupation into its work activities, while standard practice in the literature, does not provide a complete representation of every occupation: the connecting glue between tasks also contributes to the value of work"

That second limitation stuck with me. The glue between tasks, the conversations, the judgment calls, the context switching, the ability to zoom out and help clients make sense of it all, is exactly where real financial planning happens. That glue is human. And it's why I believe my profession is still very much here to stay, even as it’s augmented and enhanced by AI.

And here are ten reasons why I think financial advisors aren’t going anywhere anytime soon.

1. Liability and fiduciary responsibility can't be offloaded to AI. Clients expect someone, at all times, accountable when things go wrong. AI can’t carry legal or ethical responsibility.

2. Regulatory and compliance requirements need a human interface. The complexity of financial regulations and the need for customized solutions still require human oversight. I doubt this part can be fully automated in near future.

3. Emotional support during volatile markets. AI can’t effectively manage human emotions or provide real time reassurance during market panics, layoffs, or unexpected life events.

4. AI may give technically correct but contextually bad advice. It might optimize without understanding family dynamics, lifestyle preferences, or legacy goals.

5. AI can hallucinate or give confidently wrong answers. If you’ve used it, you know: sometimes it sounds smart but is confidently wrong. That’s not great when you’re talking about life savings.

6. Behavioral coaching inherently requires a human. Helping someone change money habits, avoid lifestyle creep, or stay invested during choppy markets, that’s not something an AI can do well.

7. Building trust takes time. Clients want to feel known by their advisor. You don’t build a ten year relationship with an LLM. People want to be heard by a human.

8. Family and multigenerational planning involves delicate interpersonal dynamics. These conversations require emotional intelligence and cultural sensitivity. Experienced advisors develop tact and can read between the lines. AI isn’t there yet.

9. Some clients prefer talking to a person. Especially older clients. But even younger folks often want to know there’s someone IRL who cares

10. AI sees a snapshot. Advisors see the full story. Advisors see the full, holistic story of a client’s life. AI often only sees disconnected life fragments.

Bottom line:

I’ve been using AI (in various shapes and forms) ever since it became publicly available in late 2022. It’s helped me with all kinds of tasks, but for now, its limited scope and lack of contextual understanding keep full automation out of reach. My job still involves continuous, high touch, judgment driven work that AI just can’t fully replicate.

My value as a financial advisor lies in what can’t be fragmented or commoditized: the relationship, the empathy, and the ability to walk with my client through life’s messiness. It’s not just about individual tasks. It’s about the glue that holds those tasks together, the conversations in between, the judgment calls, the moments of uncertainty. That human glue is where real financial planning lives. And AI isn’t built for that.

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