November 14, 2024
The world is abuzz about artificial intelligence (AI) and how this emerging technology can be best used for everyday activities, from cooking, shopping and vacation planning to more complicated tasks like purchasing a home and investment planning. As Forbes aptly describes, “There is little doubt that artificial intelligence will continue to be the most talked-about technology of 2025. From the boardroom to the classroom and the hospital to the home, it’s only going to become more deeply interwoven into our lives.”1
With that in mind, Cogent Syndicated began tracking retirement plan advisor interest in emerging AI one year ago, and our latest findings from Retirement Plan Advisor Trends™ reveal that DC advisors are warming up to emerging AI’s potential. This year, more than one in four DC advisors is excited to see how ChatGPT and emerging AI can transform the industry (28%, up from 17% in 2023). In turn, a decreased proportion of advisors are not excited to see how this new technology takes off (20%, down from 30% in 2023). In fact, enthusiasm for ChatGPT and emerging AI has doubled among Independent producers (32% vs. 15% in 2023).
Meanwhile, overall advisor adoption of AI is beginning to grow. In our 2024 Advisor Brandscape study, we found 39% of retail advisors are using generative AI for work-related purposes within their practices. RIAs and National wirehouse advisors are the most likely to be using AI for professional use (at 49% and 45%, respectively), while adoption is weakest among Regional advisors (25%). Advisors are most likely to leverage AI for productivity and marketing/self-promotion and less likely to use AI for investment research.
Nevertheless, as innovation in technology expands, so do the incidence of cyberattacks and the level of sophistication driving these threats. On a concerning note, more than one-quarter of DC advisors now report cybersecurity issues and data breaches within their retirement plans (27% vs. 18% last year). Incidence rates are highest among $50M+ producers, among whom one-third (33%) indicate at least one of their DC clients has experienced a cybersecurity issue/data breach within the past year.
These findings echo increased fears reported by plan sponsors and plan participants. Earlier this year, we reported that overall cybersecurity threats are up significantly among plan sponsors, from 40% in 2022 to 47% in 2024, and have become the dominant fear across all plan-size cohorts—even surpassing the fears of underperformance and employees not saving enough for retirement. Likewise, participant fears of cybersecurity threats/data breaches are escalating in the aggregate market, driven by heightened concerns among Millennials, Gen Xers and 2nd Wave Boomers.
As firms establish new goals and objectives for 2025, our latest research findings underline that building and maintaining strong, secure digital capabilities must be paramount. As retirement recordkeepers and DC investment managers work to harness the latest digital tools, they need to be equally attentive to their data security/cyber-risk management practices and communicating their respective safety precautions to plan advisors, plan sponsors and plan participants.
Cogent Syndicated’s Retirement Plan Advisor Trends report gives firms an in-depth understanding of the attitudes and preferences of the most critical players in the distribution of DC plans to help providers find these and more opportunities to grow market share and strengthen plan advisor loyalty. Click below to learn more.
1“The 10 Biggest AI Trends Of 2025 Everyone Must Be Ready For Today,” Forbes, September 24, 2024.
Sonia Davis
Senior Product Director, Cogent Syndicated
Sonia is a senior product director for Cogent Syndicated with more than 12 years of market research experience. She has managed numerous qualitative and quantitative studies in financial services industry research, as well as the hospitality, consumer packaged goods and retail sectors. Prior to Escalent, Sonia served as a community manager for C Space, a public relations specialist for Putnam Investments and as a staff reporter for Community Newspaper Company. Sonia earned an MBA from Boston University School of Management and a bachelor’s degree in communications from Simmons College. She’s a proud finisher of the rainiest Boston Marathon on record (2018), but truly enjoys triathlon training and outdoor adventures with her black lab.
