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A dangerous idea is beginning to take hold in parts of the financial advice industry.
The idea is that because AI can increasingly perform work once handled by junior employees, fewer junior employees are needed.
It sounds commercially rational. But, I believe, it’s also profoundly short-sighted.
Across financial services, AI is transforming research, report writing, client communications, data analysis and administrative functions. Tasks that once consumed hours can now be completed in minutes.
As such, advice firms are becoming more efficient, productivity is rising, and operating models are changing.
The danger begins when efficiency becomes the only lens through which firms view their workforce.
Many of the roles most exposed to AI happen to sit at the lower end of the professional ladder, such as graduate recruits, trainee advisers, client support staff, and admin teams.
For employers looking for cost savings, those positions can start to appear vulnerable.
Yet, for me, that’s precisely the problem.
The advice profession already faces an ageing workforce and a shrinking pipeline of new entrants. Yet at the very moment fresh talent should be entering the industry, AI is creating incentives for firms to reduce the number of opportunities available.
The result could be a profession that looks more efficient on paper while becoming weaker underneath.
I am very clear on this: Junior roles are not simply there to perform tasks. They are where people learn the profession.
They are where future advisers acquire technical knowledge, client experience, commercial awareness and judgement.
Remove enough of those positions and something important disappears with them.
The industry loses one of its primary mechanisms for developing talent.
There’s a growing tendency to talk about junior employees as though their value is determined entirely by the tasks they perform today.
That’s a mistake as the value of a junior employee has always been tied to what they can become tomorrow.
Every adviser managing significant client assets today began their career performing work that was repetitive, administrative and time-consuming. Nobody hired them because they represented maximum productivity. They were hired because somebody recognised their future potential.
AI is changing the productivity equation. It’s, however, not changing the importance of human development.
The industry risks forgetting the difference.
Technology can automate research, draft reports, and, of course, process information at remarkable speed.
What it cannot do is create experienced advisers, teach judgement and develop emotional intelligence.
It cannot build the confidence required to guide clients through retirement decisions, market volatility, inheritance planning or family disputes.
Those capabilities emerge through years of exposure to real people and real situations.
There’s no substitute.
The irony is that AI should be making junior professionals more valuable, not less.
A graduate entering the industry today has access to tools previous generations could only have imagined. Research can be completed faster. Analysis can be performed more efficiently. Administrative burdens can be reduced dramatically.
This should allow younger professionals to spend more time developing higher-value skills earlier in their careers.
Fewer entry-level opportunities ultimately means fewer skilled professionals.
The profession cannot automate its way out of that reality.
There is also a broader risk that receives far less attention than it deserves.
Young people are paying attention.
They can see AI generating content, analysing data and performing tasks that were traditionally completed by graduates and trainees. They can also see firms discussing efficiency gains through workforce reductions.
Many will inevitably ask whether the industry still represents an attractive place to build a career.
Financial advice should be competing aggressively for ambitious young talent.
The profession needs to stop viewing entry-level talent as a cost that AI can replace. It should view it as an asset that AI can further enhance.
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