The Future of Financial Planning Lies in AI and Blockchain

AI and blockchain could assist in decisions involving investments, taxes and insurance, and open new avenues for income. But financial advisors will still play a key role.

AccessTimeIconFeb 9, 2023 at 4:52 p.m. UTC
Updated Feb 9, 2023 at 7:15 p.m. UTC

The integration of blockchain and artificial intelligence (AI) technology in financial planning and portfolio construction holds immense potential for efficiency, accuracy and security in the industry.

The use of blockchain and AI in this field could revolutionize the way financial advisors build portfolios and manage client information.

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Financial planning

In the field of financial planning, the integration of AI and blockchain technology could provide a much-needed upgrade. AI algorithms could analyze vast amounts of data to assist in making informed decisions regarding investments, taxes and insurance.

The algorithms could make real-time adjustments to financial plans, automate updates to plans based on changing legislation and reduce the risk of errors and fraudulent activities – all in a matter of seconds. This would lead to more efficient and accurate financial plans, freeing up time for financial advisors to focus on providing personalized advice and improving client relationships.

By utilizing the secure and transparent platform provided by blockchain, AI algorithms could also analyze and securely store sensitive financial information such as Social Security income information and tax information. This could allow for faster and more accurate calculations, potentially leading to financial plans that automatically adapt in real time without the need for manual updates.

Portfolio construction

Traditionally, portfolios have consisted of a mix of stocks, bonds, cash and sometimes a few alternative investments. However, with the advent of non-fungible tokens, the future of portfolio construction could be changing.

NFTs allow for the fractional ownership and sale of any asset through smart contracts stored on a blockchain, potentially enabling portfolios to hold unique assets such as music albums, real estate, direct-held businesses, watches and artwork.

These new investment opportunities would allow clients of financial advisors to not only own unique assets, but to generate income from them in various ways.

  1. Through NFT staking, a process in which holders lock up their NFT assets on a platform or protocol, clients could earn rewards for holding onto their assets and helping secure a network.
  2. Owning unique NFT assets that represent actual assets can also lead to passive income streams, such as rental income or royalty payments.
  3. By fractionally selling assets through NFTs, clients have the opportunity to liquidate fractions of holdings and receive lump sums of cash – a process which, previously, may not have been possible with certain assets.

All of this opens up new possibilities for investment and brings us closer to a future where the average person's portfolio may resemble that of a hedge fund or venture capital fund. By exploring these cutting-edge technologies, financial planners and investors alike may be able to create a more diverse and secure investment portfolio with an extremely wide array of assets.

Estate planning

Estate planning involves the creation and implementation of a plan for the transfer of assets after death or while alive but incapacitated. It’s often a painful and expensive process that can be hard to implement properly.

With the integration of blockchain and AI in estate planning, smart contracts could be used to create, monitor and implement estate plans, potentially reducing the risk of processing problems. The use of AI algorithms in estate planning could provide real-time updates on changes in assets, the law and the market, allowing for a more accurate and up-to-date estate plan.

Smart contracts on the blockchain could automate the distribution of assets and ensure they are allocated according to the wishes of the individual, without the risk of fraud or human error. Blockchain could also ensure that all estate-related information and transactions are secure, reducing the risk of data breaches.

Human vs. technology debate

For decades, the financial advisory business has remained largely unchanged. However, these cutting-edge technologies are set to revolutionize the industry and have for years sparked a human vs. technology debate in the realm of financial advice.

The incorporation of AI and blockchain technologies into the financial industry will automate many routine and complex tasks, freeing financial advisors to focus on higher-value activities that require their unique skills and expertise.

Despite these advancements, the human element of financial advice will remain critical. Clients seek not only knowledgeable financial advice but also a personal touch, and financial advisors who understand the human behind the client will continue to be in high demand.

Preparing for the future

Going forward, financial advisors will need to be proactive in their preparation to effectively incorporate AI and blockchain technologies into their practice. They will need to pay attention to not only the possible implementations of the technology but also to regulation of them and how that will affect their practice.

This means financial advisors will need to stay informed and educated about the latest advancements and developments in AI and blockchain technology and make any necessary updates to their processes to stay ahead of the curve.

Equally important, advisors must educate their clients on the benefits and implications of these new technologies, working together with them to develop plans that leverage their investments. By staying ahead of the curve, financial advisors and their clients can reap the benefits of these new technologies while ensuring their financial plans remain effective, efficient and secure.

As the financial industry evolves and technologies evolve, the role of the human financial advisor will become no less important. The personalized touch that technology simply cannot replicate will never be replaced. Financial advisors who are able to leverage new technologies, stay up to date on the changing landscape around us – while also focusing on improving their communication skills – will be at the forefront of the industry and well-positioned for success in the years to come.


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DJ Windle

DJ Windle is the Founder and portfolio manager at Windle Wealth, where he manages the Income Growth and Crypto portfolios. He is a contributing writer for CoinDesk's Crypto for Advisors newsletter.