How not to become the Kākāpō of Financial Advice

[OPINION]

Thursday, July 16th 2026, 6:00AM

by Grant Pearson

Image: Stella the Kākāpō on Codfish Island. Source: Department of Conservation

The warning from nature is blunt: when a slow-moving species mistakes isolation for protection, disruption does not arrive politely, but savagely and often permanently.

New Zealand’s financial advice sector now faces a similar situation. Artificial intelligence is moving through financial services at speed, compressing cost, removing friction and challenging assumptions that once felt impenetrable.

For decades, advice has remained one of the most human, relationship-led and margin-rich parts of the financial services value chain. But that position is no longer guaranteed.

Around the world, wealth managers are already using AI to automate administration, scale personalisation, support portfolio design and free advisers from low-value operational work. But this is just the start.

Replacement comes next, and fast, and more revolutionary than previous technologies. From humans – to entire automated systems with human-like interactions.

The uncomfortable question is not whether AI will improve adviser productivity. It will. The sharper question is whether it will then change what clients are willing to pay for, how advice is delivered and who controls the client relationship? The entire business of financial advice is up for grabs.

Beware Of Relying On The Thai saying: “Same-Same But Different”

Most advice businesses resemble cottage businesses: high-touch, low-scale, dependent on recurrent big margins protected by fragmented systems and that treasured thing called the ‘relationship’.

Consumers receiving and experiencing near identical high-cost propositions from advisers kept the market narrow yet juicy.

The assumption has been that relationships, fragmentation, complexity and geography provide a durable defence. Other service sectors once believed the same. Travel agents, banking, call centres and graduate recruitment have been reshaped by new technology, automation and changing consumer behaviour.

In other technical professions armies of graduates after years in tertiary education, along with middle management roles, are being eliminated. By example a New Zealand law firm reduced graduate intake to just 25 from many hundreds previously.

Friction Is No Longer A Business Model

AI can already support many activities that once required a skilled human adviser: building rapport, collecting client information, identifying risk preferences, modelling income needs, generating investment commentary, assisting with rebalancing, and producing client-ready narratives from data.

Ai is not limited to office hours. It does not need a meeting room, nor for a client to wait a week for engagement. It does not need staff.

The profession is being pulled toward being ‘just infrastructure’: always-on, data-fed, automated and embedded inside the platforms and apps clients already use in other parts of their lives.

Research, execution, compliance support, reporting and communication can increasingly be linked seamlessly. The result is not only a better adviser toolkit. That’s Just its first iteration. It is a far lower-cost operating model that can serve far more clients with minimal human labour and skill yet still feel ‘very human’.

When The “Relationship” Becomes Digital

For years, it’s been argued that the relationship is the irreplaceable pillar of advice. That may remain true in the emotionally complex human moments: family succession, business exits, conflict and irreversible financial decisions.

But the everyday expression of what a relationship is, is changing fast. Ai agents can now converse naturally like a person (often more in sync with a client than an adviser). It can respond instantly, remember preferences, summarise history and adjust tone and empathy.

In banking, insurance, hospitality and customer service, clients are already interacting with “fake-real” people without always noticing.

Recently I phoned a restaurant to make a reservation. Unbeknown to me it was Ai, yet the fake-human was indistinguishable from a real one.

More significantly, a US company recently trialled a service for people that had lost their partner. All they had to do was give the Ai agent photos, videos, texts and emails of their loved one- and presto! They were back.

Conversing daily, messaging, recalling, asking, sharing, comforting and so on. When the trial ended many users sued the company to try and force its continuation- even though they knew it wasn’t real!

The lesson for financial advice is uncomfortable

The relationship may not disappear, but the human adviser may no longer be required to deliver it. Advice has been one of the last economic bastions in financial services to enjoy generous margins.

Asset management, administration, execution and platform services have faced waves of fee pressure. Advice largely escaped because it was personal and operationally difficult to scale. AI challenges these protections.

The next phase of competition will not just be losing future clients but poaching of existing clients too. Replaced by something that costs much less, with little friction, is intuitive, enjoyable and still feels good.

In New Zealand, the pressure is likely to begin in areas like KiwiSaver and direct investment platforms. The industry globally is always confronted with a ‘value versus price’ challenge. Ai will smash it.

The Adviser’s Strategic Choice

For advisers nearing exit, the message is pragmatic: prepare before the Ai wave whilst big multiples still exist.

For younger advisers and growing firms, the opportunity is different. Run toward the technology beyond simple productivity. Take Ai courses- now. Don’t fall into the trap of thinking you can offload personal Ai skills.

It’s far more than just a tool and it isn’t only a series of packaged products to be bought- it’s an entirely new way of doing business. Build your business proposition for thousands of clients, not a hundred. Stage one is to focus on low-hanging fruit: overhead and productivity.

Future winners won’t be the most proficient human financial advisers. They will be owners of services that use Ai for advice expertise delivered with behavioural insight, run conversations and execute direct marketing within an innovative business modelSt

Ai will handle most interactions: handling risk evaluation, commentary, client meetings, product selection, asset allocation, research, compliance and administration. As bespoke tailors once discovered, the alternative doesn’t have to beat what you do, just get close for much less!

Clients will be attracted to these offers because the new experience and result will be like it is now but embedded into their daily lives: visible on screens, subtlety prompting and responsive by a voice that’s indistinguishable from a human.

Always available, easy to share and much cheaper. No forms. No waiting. No appointment. Cheaper. Faster. Easier. On their terms with enjoyable interactions.

It has happened many times before with transformative technology. Ai however is the most transformative since electricity but faster moving.

How Long Have You Got?

No one can answer precisely. For example, main street travel agents should have disappeared a long time ago! But they now also face similar Ai replacement finishing what SaaS software and travel sites didn’t.

What is fairly certain is it’ll be ‘sooner than later’. The pace of Ai is accelerating, and the technical issues are already solved and awaiting integration.

The direction is clear.

Watch KiwiSaver, platforms, administrators and research houses evolve first. Fees will decrease whilst delivering more. The early signs of disruption are unlikely to arrive as a dramatic collapse.

It starts with better client journeys, lower prices, faster service, better access, and quiet exits at lower prices of advisers who assumed loyalty and their relationship would be enough. New competition doing what an adviser used to enjoy as their sole domain will be thrust open to many others.

Isolation, tradition and friction are no longer defences against change in kiwi financial advice. Acceptance, preparation and timing will matter. Don’t follow the kākāpō.

Grant has more than 37 years in advice and funds management spanning four countries. He consults to the industry and is the founder of New Zealand’s first Lean Family Office service for VHNW and UHNW individuals and families using technology to open access to those with less than $50 mill in assets. Grant mostly resides in New Zealand.

Tags: Opinion