Our Tech-Forward Future

By Bob Veres

As I write this, I just came out of the T3 Technology Conference with my head spinning because, well, everything was different this year from all the previous years. In previous years, the tech focus in session after session was always about improving the efficiency of the back office team, making it easier to manage paperwork, input client data, handle trades, rebalance, etc. This year, everything was about using tech conveniences to leverage the front office, saving time for advisors.

In previous years, you would hear bold predictions about how artificial intelligence (AI) would lead the profession into a bright future but nobody ever offered any specifics about how exactly it was going to do that. This year, at least half the sessions presented actual use cases for AI—in detail.

My conclusion from this head-spinning shift is that advisory firms are going to completely turn over their tech stack, perhaps more than once, over the next five to10 years, depending on how bold they are and how closely they want to approach the bleeding edge. And this process will be far easier in terms of staff training and mastery of the new tech than it ever was before.

The Tools of AI

The low-hanging fruit of AI is the new note-taking tools, like Jump, Zeplyn, Zocks, Mili, GReminders, et al. All will record client meetings, produce a nice summary advisors can edit and send to clients, and in some cases also pull together past summaries for the meeting preparation, trigger workflows from the conversation, and automatically send the reviewed copy of the meeting notes to the client record in the CRM. (Yes, there are potential compliance issues. But in a recent article in my Inside Information publication, I explored how to address them, in detail, with a leading compliance attorney. The bottom line is that with a few policies in place, they can be addressed with relative ease.)

The other immediate use case is having AI “read” documents and statements and populate the relevant data fields in a calculation engine or analytical software. FP Alpha and Holistiplan were the pioneers in this OCR/AI tech but now it’s everywhere, particularly in estate planning (reading and summarizing the contents of existing wills and powers of attorney, etc.) and prospect analysis (reading the prospect’s brokerage statements and putting the information into a form that can be analyzed and discussed in the initial meeting).

What’s to Come

Down the road, we’re starting to see hints of AI user interfaces where you can talk to a program and it will either execute a task for you or explain how to make it happen by navigating you through the usual bewildering maze of drop-down menus. Training your staff on a new tech solution has always been an onerous chore, not to be taken lightly. It will be far less onerous in the future.

Further down the road—although it’s here now—will be an entirely new tech configuration, where a data warehouse or data lake will hold all the information about all the clients—what advisors have now in their CRM, planning, document management, portfolio management, and risk tolerance silos. The analytical software (which could be your existing programs) will sit on top of this comprehensive data source and pull what it needs as needed. Advisory firms will also be able to put their firm’s financial data and metrics into this data repository, and build customized apps that allow them to track their financials and key performance indicators.

No, this is not AI, per se, but the new apps that sit on top of the data warehouse will make generous use of artificial intelligence capabilities to analyze client situations (pulled from more comprehensive access to all the data) and make specific recommendations about specific clients—which the advisor can enhance and deliver.

The Big Picture

The picture that emerges from these new ways to think about tech is advisors will have more time to do their analytical work at a deep level, and associate advisors will be freed from rote note-taking activities to spend more time on career development and their own planning activities. The speakers at T3 were often predicting that advisors will be able to double their client load but my guess is (at least initially) most advisors will work with the same number of clients, providing deeper levels of analysis and service.

Meanwhile, advisory firms will leverage AI to tease out possible strategies to explore with their clients. What FP Alpha and Holistiplan already do, and EncorEstate Plans is doing in the estate planning realm, will become features of Social Security and college funding solutions, and perhaps even expand into things like shopping for a mortgage refinance option and more customized health insurance coverage during the annual enrollment window.

Speaker after speaker at T3 assured the audience that AI is not going to replace financial planners, although that was pretty obvious from the non-relationship-based use cases they presented. But it’s not hard to see how new tech is going to raise the advice game a bit by giving advisors more time and a head start on the analysis. 

And we may be just at the beginning of this head-spinning tech evolution. In a T3 presentation by Tony Leal, former CTO of MoneyGuidePro, and Brian McLaughlin, founder of Redtail, they talked about how AI is making it much easier for developers to write code—meaning that a visionary’s great idea can be brought to market much more quickly than ever before, and the solution will be much closer to the visionary’s original idea. Attach an AI interface to creative new analytical solutions and planning analyses, and advisors might be evolving their services into areas that most of us never thought possible just a couple of years ago.

Winners and Losers?  

The potential losers will include the organizations that currently rely on legacy technology—a list that includes the brokerage firms and the older independent custodians. I’m guessing a fair number of advisory firms will also lag behind because they aren’t willing to go where AI-powered tech is taking us.

The winners of the new fintech revolution will be the most adaptable advisory firms. Smaller firms will “employ” the new AI tech and enjoy more capacity without having to take on extra staff. Large-but-nimble firms will no longer fear retraining their teams whenever they switch to a better solution.

And the biggest winners of all could be advisory firm clients, who will enjoy more attention from the firms they work with, and perhaps also more comprehensive advice about their financial lives.

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Bob Veres is the publisher of Inside Information and one of the strongest advocates of Fee-Only planning in today’s profession. If you think his columns are full of the stuff that hits the fan, tell him so directly at bob@bobveres.com.

image credit: Adobe Stock Images