Financial advisers should give greater focus to their client relationships amid an increase in artificial intelligence (AI) usage in the financial planning sector in 2026, according to Hoxton Wealth.

Hoxton Wealth CEO, Chris Ball, said the momentum gathered by AI will continue within the financial planning sector and reinforce the importance of the client relationship.

He noted that client relationships were the one thing that AI cannot effectively replace, meaning those that can develop and nurture those relationships would be the most effective planners.

“We are going to see significant impacts from AI this year,” Bell stated. “Some will say it’s a bad thing, but, in my view, we should be embracing it. It's here and anyone would be stupid to ignore it, if you aren't embracing it, you’re in for a tough time.”

Ball highlighted that the technology was becoming better and cheaper, and allowed advisers to be more efficient and personalise services based on the requirements of each client and their portfolio.

However, he warned that AI was only as good as the data that goes into it, and the industry was therefore realising that they need to get their data in order to gain the greatest benefit.

Looking at the impact of geopolitics on financial planning, Ball saw 2026 as an “interesting one” for the markets.

“In 2025, we had a dip early on in April following the Trump tariffs, but since then the markets have been on a relatively steady upward trajectory,” he said.

“I look at it and think it surely has to end at some point, even though there are signs still suggesting it won’t.

“So, from an adviser's point of view, if we do see markets dip off this year, that will hit revenues, and, from a client's point of view, if they’re planning retirement or something else, as advisers we need to make sure we help them line that up.”

This year was likely to be an uncertain one and advisers were urged to brace themselves for unpredictability.

However, this did not necessarily mean acting cautiously, as this suggested that people were best off sitting in cash, but Ball warned the opportunity cost of doing that could be significant.

“At the start of 2025 with all the tariffs, I could have just sat there and said don't do anything because we don't know what's going to happen,” he continued.

“Obviously, hindsight is great but, at various points during the year, people have looked at their situations in that context and felt it had to bottom out, but it didn’t.

“It just kept going. That's the problem with being overly cautious. The caveat to all of this is that if you do have any immediate or near-term cash requirements, you should be careful and park those funds so if there is volatility you are not having to sell at a loss, but if you don't, you should consider being invested and trying to time the market.”

This was where the relationship with a financial adviser was even more important, according to Ball.

“The Vanguard Adviser’s Alpha study suggests that an adviser will add 3 per cent per annum or roughly that over the long term on your portfolio versus not having one,” he said.

“One and a half per cent of that they attribute to behavioural coaching during these unpredictable times. This is where advisers add value because most people would have panicked.

“Trump's in and he's already done tariffs, God knows else what he's going to do, let's just sit in cash and hang it out. Well, you'd be 20 per cent down year-on-year compared to if you had stayed invested in the markets.”

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