Surya Kolluri is the Head of the TIAA Institute. Emily Watson is Senior Director of the TIAA Institute. Adam Felts is a Research Associate of the MIT AgeLab. Chaiwoo Lee is a Research Scientist of the MIT AgeLab.
When people make important life decisions spanning finances, family, health, work, and home, they often seek advice. Not surprisingly, longer lifespans, changing demographics, and new products and technologies in the marketplace are increasingly reshaping the nature of this advice and how it is delivered. In light of these developments, we recently undertook a research study to inform us about the future of financial advice, cosponsored by the TIAA Institute and MIT AgeLab. This work confirmed to us that, although technology is revolutionizing what and how advice is delivered, the human element remains crucial for meaningful financial guidance, particularly as people face longer retirements and more complex financial decisions.
The human-digital balance
Our analysis confirms that there is a significant “trust-versus-expertise gap” in financial advice delivery. Almost all Americans turn to family and friends for financial guidance, yet only 40% are satisfied with the advice they receive, highlighting the need for a more sophisticated hybrid approach that combines human expertise with technological innovation.
Key statistics demonstrate the evolving landscape:
- 62% of clients want their financial professional to be primarily an information source
- Over 57% of survey participants have used AI-enabled chatbots
- Traditional communication methods remain preferred, with phone calls (62%), in-person meetings (60%), and email (57%) leading client preferences
Professional expertise remains the cornerstone of advisory relationships, with clients particularly valuing advisors’ ability to explain complex concepts and maintain high ethical standards. While artificial intelligence and digital tools do offer promise in handling routine tasks and information processing, they still cannot fully replace human advisors’ ability to develop meaningful client relationships, motivate clients’ behavioral change, and provide the emotional support that many advisees need as they age.
The evolution of client expectations
Our research also identified some key demographic differences in how people seek and value financial advice. For instance, we found that women prioritize retirement savings advice both when they start their careers and near retirement. Nevertheless, many fail to seek financial advice during midlife, when parenting and caregiving present new calls on time and money. As other examples, we discovered that younger advisees were more open to digital advice channels (including podcasts and social media), while African Americans and Hispanics favored advisors who could act as supporters and mentors.
The impact of technology
Just as artificial intelligence has found its way into other aspects of our existence, AI-powered solutions have also gained remarkable traction in the financial advice sphere. Social media platforms are fundamentally altering how clients discover, consume, and evaluate financial information.
In turn, this digital shift has created new client expectations. For instance, clients often arrive at their advisors more informed (though not necessarily with more accurate information!) than in the past, they tend to expect unprecedented transparency and choice in their options, and increasingly demand financial content delivered in concise, easily digestible formats.
Financial professionals who recognize and adapt to these evolving expectations will be better positioned to engage effectively with today’s digitally savvy clients.
The future of financial advice
This evidence suggests that, in the future, successful financial advisors will need to take a balanced approach that leverages AI and digital tools to enhance, rather than replace, human advisors. In so doing, they will need to maintain strong interpersonal skills while embracing digital innovation; focus on both technical expertise and emotional intelligence; and adapt communication strategies to meet varying generational preferences.
The financial advice industry faces an imperative to evolve. Success now demands communication strategies bridging traditional and digital preferences, alongside targeted advisor training that moves beyond demographic stereotypes. While technology offers powerful tools, the winning formula integrates these advances to enhance—not replace—meaningful human connections. Forward-thinking firms are already developing adaptive relationship models responsive to varying client engagement styles. Meanwhile, extended lifespans create unprecedented planning complexities that advisors must address with sophisticated, personalized approaches. Those embracing these shifts will build the enduring client relationships that define tomorrow’s industry leaders.
Conclusions
While technology is transforming both what kind of financial advice people need, and how they seek to have it delivered, human connections remain the cornerstone of advice. The foreseeable future of financial advice isn’t about choosing between human and digital channels. It’s about leveraging technology to enhance, not replace, the trusted advisor relationship.
This evolution in financial advice delivery highlights the enduring importance of human connection while embracing technological advancement to better serve clients’ changing needs and preferences.
Views of our Guest Bloggers are theirs alone, and not of the Pension Research Council, the Wharton School, or the University of Pennsylvania.
