AI in financial advisory: why human expertise remains essential

AI can calculate. It cannot advise.

Artificial intelligence is undeniably transforming the financial advisory profession.

But when it comes to hedging strategies, it quickly reaches its limits.

It cannot:

• Assess the risk appetite or risk aversion of an SME or mid-sized company executive, which is often never fully articulated due to a lack of experience

• Anticipate market dynamics

• Negotiate with a banker or a trading desk

• Understand complex structured products offered by banks and designed to hedge risks that may evolve over time

These are skills developed through years of hands-on experience in financial markets and hedging strategies.

But this is also a regulatory matter in France: personalised hedging advice is a profession regulated by the AMF (French Financial Markets Authority).

Without the appropriate authorisation, only general information or generic advice may be provided, not personalised advice. The advisor may face criminal penalties, a risk that most are generally unwilling to take.