Two thirds of the firms (65%) surveyed by consultants NextWealth said they expected AI to lead to a reduction in operational costs.

Three in five (58%) said they expected AI to lead to an improved client experience and the personalisation of services.

In terms of their own use of AI, the automation of routine tasks was the number one focus of advisers considering the technology, followed by use as a personal assistant and for client interaction.

NextWealth surveyed 52 financial advice and support firms in May in order to create its first AI Index Report, designed to benchmark and track the use of AI by financial advisers and supporting services.

Heather Hopkins, managing director of NextWealth, said: “While advice firms are waking up to the benefits AI can provide, there are some major hurdles that need to be crossed along the way. The main one is the age-old problem of data and systems integrations. This is a well-documented bug bear of advice professionals and it needs to be addressed to unlock the potential of AI.”

She also called on technology giants and advice market specialists to tailor their offerings sufficiently to make them relevant for the sector.

The report also found that a quarter of advice firms were concerned they could be missing out on the opportunities offered by AI.

In February the Treasury wrote to the FCA and other regulators asking them to disclose their strategies on AI regulation.

Last year, the government published the AI Regulation White Paper outlining its framework for governing AI in order to drive, “safe, responsible innovation.”

The White Paper proposes allowing AI to be regulated in a “targeted, context-specific and coherent manner across the economy.”

The Treasury wants regulators to update their approach to AI with the aim of increasing transparency around how they plan to implement the AI Regulation White Paper proposals.