Using AI to Deliver Holistic Planning Efficiently

Research shows that clients are demanding a more comprehensive approach from their advisors to meet their planning needs. Tax, estate, health care and insurance planning are the most requested areas, but traditionally, these areas have been difficult to scale and therefore, not provided to most clients. AI-powered tools are changing this. Advisors now have the ability to truly offer holistic advice, all while solidifying their value proposition. In this session, we will delve into advisor use cases and solutions available now.

Transcription:

Rachel Witkowski (00:10):

Good morning everyone. Thank you for coming to the panel on using AI to deliver holistic planning effectively. My name is Rachel Witkowski, I'm the AI Tech Reporter at Financial Planning. I'm very excited to introduce you guys to this wonderful panel. I've interviewed many of them multiple times, different locations, and they have some really great insight into the types of tools that advisors can use. With that, I'll allow them to have a short introduction on who they work for, what they do. Andrew?

Andrew Altfest (00:44):

Yeah, thank you. I'm Andrew Altfest. I'm very excited to be here with everyone today. So I'm the Founder of a software company called FP Alpha, and what FP Alpha does is it allows advisors to automate estate tax and insurance planning simply by uploading their client's financial documents will trust tax return insurance policy, and visualizes those provides insights and allows advisors to go beyond and model different scenarios. I'm also a Financial Advisor and President of a Financial Advisory firm in Midtown Manhattan called Alves Personal Wealth Management. We managed about $1.7 billion.

Vimal Vel (01:25):

Hello everybody. Vimal Vel. I'm Chief Product Officer at Morningstar's Data and Analytics business. So we build solutions for advisors, wealth managers and asset managers, and our platform touches the workflows of about 180,000 advisors in the North America market. So very excited to be here in Connect.

Dr. Jordan Hutchison (01:47):

Yeah, how's everyone doing? I'm fighting a little bit of the East Coast to West Coast Energy, but I'm Jordan Hutchison, so I'm the Head of Technology and Operations for RFG Advisory. We're a platform for advisors, so we have about 120 advisors. We're about five and a half billion and we're a little unique in the aspect that the average age of our advisor is 46 and so we're a little bit younger, very ProTech on things, and my team actually oversees all of technology operations and affiliation, so onboarding of the advisors.

Rachel Witkowski (02:22):

Thank you guys. So one of the first questions I have, I am a big fan of, especially with AI being a few years in its infancy, I love to know how things work, show me how it works. That's what I always ask for this particular panel though, I wanted to know what are the ways or the types of AI tools that advisors can use to offer holistic planning efficiently?

Dr. Jordan Hutchison (02:49):

Do you want me to start it off? I'll jump in. So for us, the way we looked at it as trying to find whenever we jumped in of AI when everyone was like, alright, well how are we going to use this? How are we going to do it? Is there a big risk here? We looked at it as what are those non-revenue generating activities that an advisor does that we can take off and actually throw technology at it instead of throwing bodies at it? And so when we looked at it, we looked at all the different areas that they're working on and so for example, the planning side, a lot of teams have advanced planning team. We would look at a product and say, here's a great place for an advanced planning. Find something that can read a state documents, tax documents until you can, so you don't have to go with your CPA or an attorney to be able to just get that initial phase. It's going to cut down significantly on the time that you're going to get billed for those. But then also we looked at areas of compliance, what are repetitive tasks over there? So compliance and internal things that are review and for the tasks that need to be automated when it's the same thing over and over again. So the way we looked at is what are those main tasks day to day that advisors get frustrated with and that are just directly to revenue generating that are usually something they have to outsource or hire someone to do?

Vimal Vel (04:14):

Yeah, so we've spoken about AI being an assistant, a copilot, A couple of different areas we've been working on. One is as AI as an information assistant, so just helping you retrieve information about client, about markets, about situations. Second would be as a workflow assistant, as you go through that process with the client, bringing in a level of automation, bringing in a level of efficiency into that process, it becomes valuable and helpful. And the third one is as a truly intelligent assistant, so helping improve the quality of that engagement you're having with that client, not just in terms of doing things for you but just making that engagement qualitatively better, helping you be better prepared. So those are the three types of capabilities that we're looking at and we're considering as we think of our solutions.

Andrew Altfest (05:15):

So I agree with everything that's been said so far, but I think if you look at where we are as an industry, our industry has really focused on investment management because what's the problem, what's the issue and why have we been limited to providing investments? It's that you haven't been able to scale comprehensive planning. So last weekend, and I had the privilege of speaking at the CFP Board Connect conference, and if you look at the domains of the CFP program, you have investments, but then you have estate planning, tax planning, insurance planning, employee benefits, the industry, we've been focused on investments because that's the only thing that we have time to do. There's just only so much time in the day and to be able to provide all of this advice that we want to, it's just been impossible except if you're working with the Rockefellers of the world.

(06:09):

But for those of us who are working with a client base of 500 to $10 million, it's just been no way to provide the advice. So what's the solution? Well, the answer to this and to be able to scale advanced planning, comprehensive planning to clients is to be able to use AI to be able to take the information from the client that you have about a client, understand that information using a genius assistant through the form of AI and be able to help the client understand where they are and provide insights. And so you're automating a lot of the planning process. So the whole CFP board, whole CFP financial planning process is being automated now. There are tools to get it done. What we do at FPL Alpha, of course we focus on estate tax and insurance planning and automate that part of the process. There are other tools that are automating the investment part of the process, reading investment account statements and being able to take the information you have.

(07:05):

Let's say when you're meeting with a prospective client, you might have 600 positions to look through. You can actually automate the reading of the statements, automate the analysis, and then go automatically to a proposal. So there are tools that actually are getting that done. And then even on the traditional retirement planning side, there are tools that are coming out that actually allow you to get automated scenarios. What is the optimal scenario for this particular client? So rather than going through a long analytical process, we have always done to this point with data entry and trying to figure out how to get a client from 83% success rate to 92 if that's what you're trying to do. Maybe three is okay for some of us, but that's been a manual process. There are tools actually will get that done, that analysis done for you today that are helping and being an assistant. So those are the ways to automate more of that comprehensive planning process to save time and be able to provide it to more of our clients.

Rachel Witkowski (08:10):

Gotcha. I wanted to ask, and even in the conference, I've heard from advisors too, those roadblocks in being able to adopt AI tools and in our survey we released yesterday of the 270 advisors, most of 'em said the hardest part was just having the time and then knowing what tools they should use that time to experiment with. What is your response to that in terms of getting past those walls?

Andrew Altfest (08:36):

Yeah, well I can start. So I think that quite simply the best tools out there are going to be really well aligned with an advisor's workflow. And so this idea of AI and that's great. You want to have something that's under the hood that's automating and saving time, but you want to first define your workflow as it exists today and also perhaps your ideal workflow if you're looking to plug into things that you're not doing and then find a tool that's really well aligned. And I think this, all this talk about trusting AI and I think that's important, but yet you're not really even going to notice the AI component if it's just something that fits into your workflow. I mean if it's reliable, if it's giving you the right answer, if you can trust it. So what we focus on at FP Alpha for example, we focus on high degree of accuracy and what the AI is doing and then also explainability.

(09:39):

So I think one of the problems with a ChatGPT for example is that you have no idea how it came up with its answers. So how can I trust something? Going back to there's a lot more push today by regulators, CFP board and others to actually have you understand the output before you presented a client. How can you understand an output If it's coming from ChatGPT, you can't. But in this idea of explainability understanding, this is how the insight came about or this is if you want to understand how a document is reflected, what's important to us at fp alpha is showing exactly where if it's an estate document, what page did this part, what's being reflected here on this document, where did it come from? So you can cross reference it if you want, get peace of mind, but also the insights. Why did this insight come about Roth conversion was recommended because a client's temporarily in a low tax bracket and so those types of things, you understand why it's come about, you can check it, you can do something else with it. So I think that's really important when it comes to successfully using AI.

Vimal Vel (10:45):

I'd say the criteria you're using to choose AI tools should not be very different from the criteria you use to choose other solutions. So there's a job to be done and there are solution capabilities that are out there, some of them better than others, but it's just important to focus on the job to be done and not focus on the technology itself. You don't want to start with the solution, actually think it's important to start with the problem you're trying to solve. So we hear a lot of talk about can this replace steps in an advisor's workflow? I actually think it's important to not try to do that, right? Is it's about making the workflow better, it's about making it more effective, more efficient, and choosing the tools should be based on those considerations because otherwise we end up with a situation where tools don't get used. So firms get access to tools, they push advisors to use them and advisors get frustrated because you're forcing the problem. So I think it's helpful especially when new technologies emerge like this is focus on the problem and sometimes small incremental benefits go a long way towards gaining adoption from the advisors.

Dr. Jordan Hutchison (12:00):

I agree. The two things I would say that if you're trying to just dip your toe in and get a feel of what AI product I should be using, I mean there's some conversations that have been done by some companies here that are huge AI products that they want you to spin up a data lake and then you're pulling API from your CRM and that's a big investment and that's a big conversation. I don't think we have time for that today, but we can talk about that. That's a much different, so if you're trying to just entry levels based on that research, just trying to get a feel of it. We had some advisors that were a little cautious, literally we have an advisor that works with the NIL space and when the LSU women won the basketball championship, he has NIL and clients in his book of business, he just said, Hey, write me a letter that's thanking them and congratulating on the amazing work that they did and that was his first step in because that was literally just using like Gemini, ChatGPT, whichever one you pick.

(13:09):

I wouldn't even get into the specifics of which one, just start with something like that. If you've already been well past that and you are looking a little bit farther ahead, I would say similar to what he was saying is what's the outcome that you're trying to solve for and also reflect on your day. Where are you getting just pulled into things with a process? Is it new business development? What Andrew mentioned that there is technology out there that you can submit that statement and it'll already populate all the different things and even populate possible solutions from those statements. That's one. If that's business development is really you're like, Hey, I got three new clients but I don't even have time to give 'em a proposal yet because I'm just overwhelmed. Think about those different things. Is it planning or is it workflows? Is compliance a drain on you?

(14:03):

Then maybe that's something you should start looking at. So think about what outcome you're trying to solve. Don't go in with just like, Hey, I saw this new shiny object, that's a product. Then you're going to fall into exactly what he was mentioning that no one's going to adopt it. You're probably not going to use it because you're going to get frustrated. Think about what outcome you're going to solve and then you might see a quick get some momentum on that where you're going to be able to jump right in and use that product and you're going to see it and you're be like, all right, I'm going to get everyone else on board with it too.

Rachel Witkowski (14:33):

Those are some great examples. With that being said, I mean we have a ton of fantastic demos. What should they be mindful of and what should they be asking vendors before taking that jump?

Vimal Vel (14:46):

I think it's good to look at specific areas that you want to improve in your advisor's workflow. So you don't want, the technology is still nascent enough, the capabilities are still evolving, so it's unlikely you're going to go and start using one solution for everything is a very high likelihood that you might have to evaluate multiple solution providers. So we've heard a lot of talk about just summarizing meeting notes, helping advisors, prep for client discussions as a category. Seems like one, there's a lot of interest in that space. There's also a lot of progress in that space. Just summarizing information, helping advisors prepare for that conversation, make their prep more efficient. I think that's a good area to focus. So rather than going broad, it'll be important to focus on know what you're trying to solve for and then ask the questions tied to is this going to make my process better? Is it going to improve the quality of engagement the advisor's having with the client?

Dr. Jordan Hutchison (15:54):

I'd say if your team doesn't have, you don't have a full compliance team and a full technology team, our model, because a platform, our advisors lean on us for those things, but if you're a smaller firm and you're doing this by yourself, I would say also look at when you see a vendor or at a conference or whatever, they're probably filling up your email with it. No disrespect to the vendors, but I would ask 'em adopting this and using it because a lot of times you want to get something that's really going to be adopted from your operations team or your staff because that's going to give you a lot of edge because that might be where things get backed up, you get backlogged from because they're handling all that paperwork, all that processing for things. Is there something that would help them there? We saw the demos of ZOX and Jump the other day.

(16:49):

I think that's going to be even more valuable for the CSA, the client service associate than the advisor because now they've got your notes in a place where either you might already be using dictation for it and if you're doing that, great because this is now a dictation on steroids. But I think that thinking about it in that lens too of ask them who uses this, who's like a power user of it and maybe even ask 'em to talk to that person because that will open some insights of how are you using it because I really want to get them adopting this instead of just like, Hey, I got this cool new shiny AI product and then your advisors or your CSAs are like, ah, I don't really see how this fits into what we're doing.

Andrew Altfest (17:31):

It is tough. I mean it is tough right now because we want to invest in new technology, but at the same time we have to be cautious and we have to gain expertise in how to evaluate this new technology. So security and what's my expertise in terms of being able to evaluate that if I put client information in something that it's going to not going to come back and show up in some other user's report. And so what is the security level of the tool I'm using and then this is a new tool. How long has it been around? Who else is using it? Have large financial institutions approved it and gone through due diligence and come out, okay, do they have a SOC two? Is this company going to be around in a few years? Is this company going to be sold and I'm going to have to be looking at this again.

(18:25):

I mean there are all sorts of things you're making a commit. No one wants to use a tool that is going to not be around in three years and go back and do the same thing over again. So it is tough. I mean it's tough because we want to all be early adopters of this technology and get there first and get the use cases that we've talked about and it's an advantage over an industry. Our industry has not been the fastest to adopt new things. And so it is tough. I would suggest doing an evaluation, first of all, making sure that it's SOC two, been SOC two complied. Not everyone, small companies that are just starting out might not have the funding to have that SOC two audit done, make sure that it is being used by large financial institutions and has gone through their vetting process.

(19:18):

And I would suggest looking at the longevity of the company, is this a company where a huge company already has a partial stake and it's likely to be absorbed by whatever company that is? And so I think these are all important things and I think if something is also being given away for free, I think that's usually a sign or at a very cheap price, that's usually a sign that the information, it's learning from the information that you're providing it and therefore that the security level is going to be much, much weaker. And I think also examine our processes. We all have to think about, do we want to start? Do I want meeting notes of all of my clients? What does that even mean? Do I want to use it more selectively? I want to use it in certain cases for internal meetings. Having all of my, I think it was Alan Moore at XY who said maybe that's a compliant compliance risk in and of itself because things could be misunderstood if ever someone asks for all my meeting notes. So these are all things that we have to evaluate as consumers of new technology and I think the early adoption makes it worthwhile to do so and the benefits we get, but it's tough. You have to recognize that it is tough now dealing with evaluating new technology and having to gain greater expertise to do so.

Rachel Witkowski (20:48):

I didn't have this on my list, but the pricing has been interesting. I do these tech spotlights every week and one of the questions we ask is what does it cost? And the prices are everywhere. I've seen free for a year, I've seen a thousand dollars per advisor. I can't imagine as a firm how you can balance that to make sure you're still getting an ROI at the end of the day. Do you have any thoughts on knowing what you should be paying for?

Andrew Altfest (21:16):

No. Well I think that you, back to the use case is I think the one challenge with technology adoption is what am I getting out of it and am I going to be successful in using it? And I think a lot of that is up to an ideal world. A tech company is going to hold your hand and give you those use cases. That's an ideal, but some people are better at that than others. So if you're going to be converting prospective clients at a higher rate or you're going to be saving a lot of time or you're going to be building relationships with the next gen, I mean these are the things that we should be getting out of our technology and they can be quantified. So what is my conversion rate today versus what it could be with this technology or how much time am I saving for us at FP Alpha? What we're easily quantifying is the time to do this work manually versus to do this through the platform. And you can say, well, what is my ROI? And a lot of people are using us also to convert more prospective clients. So what does that mean? These are all quantifiable things. So as long as we go through this exercise, we can look at what the cost benefit is and I think we're all good at doing that here and decide if the pricing is worth it.

Dr. Jordan Hutchison (22:34):

In some ways I would say push it on the vendor, make them show you the ROI of it because then you can start to really see where they see a fit in your business. I know in some of our conversations with vendors when we are looking at a piece of technology and we're like, yeah, this looks great when you demo it, but how long do you think it would take for us to do X? Or where do you see this fitting in our tech stack? Because obviously I need to have a way to not sell it, but just really pitch it to my advisors how it's going to change their day or change their processes. So a lot of times we push it on the vendor to be like, show me how this is going to be ROI to us. Then they probably have some case studies or examples.

(23:17):

We push it always on them to see where it is. But then also just a very on the napkin kind of math, try to back in on some of the time you spend on other things like what I was saying, look at your week and think through where's all your time going If you're growing at the Schwab percentage where our advisors at RFG grow 19% organic growth, if your Schwab shows it as its single digits. So if you're in that space now, obviously if you're a billion dollar shop, 1% on a billion dollars is a little different than a hundred million dollars. But if you're really struggling and you're seeing your time is stuck on that, then alright, well why am I not growing? Look at your day, figure out what's a drain on it. Try to even back in if you're not doing billable hour, but then you can kind of look back what is my hourly cost? And so if this is going to save me and the vendor says, Hey, this is probably going to save you about five hours a week, you can just do simple math there and be like, all right, well then if I get one client from this, this is already paid for itself for the year.

Vimal Vel (24:25):

So as a solution provider, completely agreed. So if you cannot demonstrate the ROI, you don't have a sale. Right? That's one. Second, it's important, and this is something we are mindful of and I think it's important for all solution providers to be mindful of, is recognizing that firms are just stacking up the solution stack is getting more and more complicated. So it's not just the acquisition costs of technology, it's also the operating costs of that technology. It's the integration overhead. So you're going to have four vendors showing up at your firm saying, I've got an AI technology to do step seven of your 12 step process. The operational burden of just integrating those things to make it efficient rather than the focus becoming about those tools is that's the risk that you have to navigate. So as one, as solution providers, we have to be mindful of that. Second, as firms, as advisors, it's important to focus on both the ROI as well as making sure it is usable rather than it becomes an integration or operational burden.

Dr. Jordan Hutchison (25:28):

Can I make one comment?

Rachel Witkowski (25:29):

Absolutely.

Dr. Jordan Hutchison (25:30):

Yeah. So one thing I'll mention on that, it's a key point that you mentioned is when you're looking at this, could this consolidate your tech stack? That's a big thing we always consider too is would this take away something that we're already using or is that on their roadmap to take away? As you were saying there, the tech stack is getting just so much that there are so many things that might be, and this is the argument I always make and sometimes when I'm vetting out products, when an advisor says, Hey Jordan, have you looked at this? Is this a feature or is this actually a product? And Andrew was mentioning some of that, is this business going to be around in two years or did somebody just have a great idea and they're building something that's really a feature of a bigger product? And I know that's a little more in the weeds, you're trying to be an advisor day to day, but really thinking through could this consolidate my tech stack so I have less vendors to manage less headaches of just making sure when this contract renews, what am I paying here?

(26:27):

Consolidation of it. I'm all on board for that.

Rachel Witkowski (26:30):

That's interesting. I was talking to an attendee yesterday who was mentioning their frustration with AI is that you have all these different tools, but it's not streamlined, but there are AI tools that streamline the platforms. Can you talk a little bit about that as a solution to a problem within AI?

Dr. Jordan Hutchison (26:48):

I think I was going to say, I think that that's the bigger investment in some of what I was mentioning and I got no laughs from it, but I was jokingly saying that that's a big conversation, but the still didn't get any last, geez, I'm terrible. But that's a bigger conversation if you're trying to maybe have your own data infrastructure and have those APIs feeding in there. And then there are a couple great vendors here that will have the ability to put the AI on top of it and you're able to query all of those things. That's a big investment, but it really does change what you're looking for and what you're doing and it helps streamline some of it. But the whole integration conversation, that's I think the value of having a lean tech stack and you're not, well, we offer four different planning softwares. You got to figure out which one you're going to use and then lean in and be like, alright, this product integrates well with this. And then if they already have that integration, they're leaning in, start pushing 'em to do more.

Vimal Vel (27:54):

So we run this annual voice of advisor survey across the 180,000 or so advisors on our platform and a couple of very interesting insights come out of that one and very consistent year over year. This doesn't change very much the past few years. One is spending more time with clients rather than tinkering around with tools. Just touching on what the point Jordan was making, and it's important to keep that in mind when you are evaluating solutions as well as when you're pitching a solution to a firm is you don't want to create four solutions that are disconnected from each other that make each step more efficient, but the overall workflow for the advisor is just become more burdensome because they're stepping in and out of multiple tools. So that's one theme that comes out. The second one is the explosive growth of information, whether it's about new investment products, trends, it takes away, it takes an enormous amount of time for an advisor to prepare for a conversation with a client, not just client specific information, but keeping yourself informed to make sure you're better prepared for that discussion.

(29:02):

So helping advisors prepare for those conversation with clients is a second theme that comes out. Just help me be better informed, help me learn and help me show up better prepared for that discussion. And this is beyond client specific information. So when you're looking at solutions, it's just important to look beyond that client workflow related things, but also step into how do you help the advisor show up better prepared and how do you make sure you're talking about the cohesive workflow rather than four steps in four different tools that just move a little faster within the boundaries of that tool. So those are two things that one, the survey gives us some very interesting and helpful signals on how to solve for the challenge.

Andrew Altfest (29:53):

I think mean this is a conversation about using AI to scale holistic planning for all clients. I mean if the tool is not connected to your other tools, I mean, how are you doing that? I mean we have data in our industry now. We have digital data from clients and the idea is to take that data and turn it into something meaningful. So if the tools aren't connected, then you're already behind in doing that because we're talking about manual data entry. So I think usingAI it has to connect. That was the first thing when we launched our platform in 2020 after building it had to, the next thing was to work on integrations and pulling all with all the CRMs and the investment accounting data and then the financial planning tools that are out there. So I would say the integrations were so desired by advisors and everyone wants something that fits into their tech stack that if it's not doing that, it's hard for me to understand how you're going to take data and turn it into actionable planning to scale holistic planning across all clients. It's very hard to envision that.

Rachel Witkowski (31:05):

I had a question about data because Michael Kitsis was talking about, well, for a firm of less than a hundred clients, he's not dealing with data lakes the huge amounts of data that massive firms would have. But is there something to be mindful of in terms of the smaller advisors and the data they have and adoptingAI and is there any thoughts on that in terms of the smaller subsets that they have? Is there still power within that?

Dr. Jordan Hutchison (31:32):

I think there's tons of power in it, and I think that it's in a prior role, I learned that there was a huge group of advisors that weren't even using a CRM, which to me sounds like stressful that they had an Excel spreadsheet to do it. If anyone's doing that, don't raise your hand, but adopt wealthbox, Redtail, Salesforce, whatever's a fit for you. I think there's plenty of great solutions out there specific to our industry, but I would say that you have a lot of valuable insights in there that is really I think going to be the bigger edge. And I know some people might've touched on it. This is an area that I love and kind of how I see technology, but that behavioral finance side of it, I think truly the future of our role as an advisor is going to be where AI technology as a whole is going to own a lot of those processes, the models you're building, whatever it is, and you're going to be able to lean in more and actually spend more time with the client.

(32:35):

So I think that speaking of kitsis historically, he usually says 50 to 75 households creeping up on maybe a hundred households. You're starting to tap out on how many people you can serve. I think that's going to go up significantly with technology and especially AI because now you're going to be able to prepare for those client meetings, which is time consuming. I was talking to an advisor last night and he said, I had four client meetings this week. I had to work through the weekends just to get my meeting follow-ups done. So I've got to find some way to gather that data quickly. And I was like, Hey, you should have saw the demos yesterday, but I don't think he's in here, but I know him well. So he would be welcome the joke. But I think that that's a big thing is it's going to allow you to have a bigger wallet share, spend more time with clients and really lean into that behavioral finance side of it, which is a deeper conversation because tech will help solve a lot of those things that are very time conducive.

Vimal Vel (33:33):

As that's happening. It's important that our general awareness about the vocabulary around the data, so who owns the data, what data does the technology use that needs to become a more natural part of how we operate? This is just understanding what is first party data, client data versus what is third party data that you're bringing in from a vendor or solution provider. That distinction becomes very important when you're feeding it into an AI engine. So those are things that we might not have had to think about as much, but as this technology starts entering more and more steps in the workflow, that becomes a very important thing for us to be mindful of.

Andrew Altfest (34:14):

Yeah, I think there's plenty that's available today that tools that are using artificial intelligence that you can actually just purchase, subscribe to. You don't need to have your own data lake, you don't need to. That becomes its own management issue. You're going to have to have a lot of resources dedicated to it usually is for firms of a certain size and that's fine. I mean if you're a massive financial institution, you could be building your own models as well. But I think what for most of us here we're going to find that it's easiest to actually just adopt the tools that are out there. There are plenty of tools that are helpful in which they're using AI and we don't need to spend our time doing that. It's the same thing with CRMs, right? I mean there's some CRMs that are basically, they come completely open for you to create whatever you want and that you'll need a full-time person doing that and it might be very robust, but that's the benefit of working with the RFG and a firm that has great resources to do that kind of thing. But if you're an individual advisor on your own and that's how you want to stay or you're at a small practice, you're not going to be necessarily doing that unless that's your particular interest.

Dr. Jordan Hutchison (35:33):

One thing I'll mention too is because a lot of talk about the data lake and are you owning your own data and all that? And if you're a firm that you've got 50 million, a hundred million and you're small team and you're working three days a week, it makes me think of, there was this great statement that Carl Richards made where he was on a ski lift in Utah where he bumped into this guy and this guy was like, oh, I'm on vacation. I am a financial advisor. I have this big shop. I'm at a big broker dealer. And then he said, oh, well where do you work? And he said, oh, well I'm an independent, I've got my own firm. And he's like, oh, well you're one of those little guys. And he goes, well, the fact is is you're on vacation. This is just a Tuesday for me.

(36:18):

So he got the abilities. I have all the flexibility in the world of my life, so I'm getting to do what I want to do every day. I don't have somebody hit me with sales quotas, tell me what I need to do, how to run my practice. And it makes me think like that. If you want a smaller practice, that's completely fine because some people want that. They don't want to be a bigger shop. I mean I have no opinion on because it's really what kind of business you want to build and that's what we push at rrg. You want to build more of a lifestyle practice, that's fine, let's do it. You want become a billion dollar shop, let's do it. We can help you. But I think in scaling that where you don't have to have a data lake, a lot of these vendors are moving their products very fast forward. They're moving forward very fast. If you have the data lake and you want to have your own custom interface and ui, you got to maintain that. So you've got to have those outsourced resources or hire somebody that's a whole nother burden for you or another thing you've got to manage. I'm very comfortable saying you don't have to always build everything in house. Sometimes use a vendor because that's their main job day to day is making their product better every day.

Rachel Witkowski (37:26):

Just don't use Excel sheets.

Dr. Jordan Hutchison (37:29):

I don't mind. It's actually my CEO, she is very good in Excel. So as my CFO, it's almost impressive how they don't have to use a mouse, they just can do so much in there. I don't hate on Excel, but I would say try not to because then you can have your data in a format that's going to be a little more streamlined for you. But no disrespect to Microsoft in Excel.

Rachel Witkowski (37:52):

I know we have a few minutes here. I'd love to open up to audience questions. Does anybody have a question?

Audience Member 1 (38:04):

I just make the observation following along. So things, what I've not seen the last couple of days is a sort of discussion about how financial advisors can take on board the basic AI models like ChatGPT or Claude and really learn to run them like a co intelligence where it's something that you have spent a little bit of time. Ethan Molik and his book Cote suggests it's about eight hours of work with an AI model before you can begin to see and understand how you can use it. And in terms of financial planning, I'm familiar with advisors who once they've had that training, are having usually successful client meetings when they know a client is coming in with a particular challenge. Like an example would be recently an advisor had a long-term client coming in. He had a big liquidity event selling an apartment complex.

(39:06):

He's been a super conservative investor for years. And the advisor knowing that they were going to discuss what are we going to do with all this money from selling the apartment complex, had an in-depth conversation with the AI model while preparing for the meeting. And at the end of about a 20 minute back and forth with the model, he simply asked it, okay, now let's generate an agenda for the meeting. And the advisor knew he could have spent four hours trying to really look at all the possible things they might do with the proceeds from the sale, but instead in his conversation with the AI model, pointed out a few things he hadn't even thought of. And it pulled together this custom agenda that the client was really very blown away by and very excited and it was a hugely successful meeting for the advisor, including by the end.

(40:03):

This advisor had been very, very conservative for years. And he started to say to the advisor, yes, you've been telling me that for years. I realize I do need to loosen up a little bit. I have a legacy I want to possibly fund. And so my point is that this advisor had spent some time really learning how to use ChatGPT in an effective way and it had huge, huge results for him. And there's just been a lot of talk in the last couple of days about the vendors and the tech stack. And what I think seems to be missing in the conversation is that advisors need to take some time to understand how these AI models can literally expand their intelligence. I call it AQ, action quotient, when you can see that you can bring it to the table really for anything, any task that you're looking at that takes more than five minutes, you really will benefit by turning to the model, bringing it to the table, asking it some questions. And it can be extremely powerful. I've seen when advisors do that. So I just wanted to make that observation because I did think that for $20 a month or $30 a month for the business, I mean this is a very small investment for a hugely powerful tool. And I would just encourage everybody to, while yes, the tech stacks are great and they definitely are going to be very useful now and in the future to just learn how to use these models effectively as an expansion of your own abilities.

Dr. Jordan Hutchison (41:44):

I think there's ton of vendors out there that have this. So there's a company called Practice Intel. There's another two that have the ability to have conversational even that they're using some of their in-House Tech to even make it more, to focus even more empathetic. There's now AI models out there that are kind of like a counselor in some ways that it shows even more focused empathy. And your example is great. We have an advisor that is heavy in the tax and estate. He uses a product called Blue Jay and it feeds in all of tax and estate law very up to date. And he will have full conversations just like that, Hey, here's this, tell me all the different rules for 5, 2, 9 plans in California. And then he builds out as an agenda in the same way. And it has been, he's actually growing a million dollars a month this year so far. So he's very much in belief. And I think that a few people have mentioned seeing it. I think he even mentioned it as almost like an agent where you've got, well, we'll even use the product copilot. Some firms have allowed copilot Microsoft's model, which gives you a lot of that flexibility.

Vimal Vel (43:00):

This might be not necessarily a word of caution, but it's important to think of it. The reason there's benefit to using it as part of a workflow solution rather than just getting access to a ChatGPT license is one for that use case. Second is there are considerations that are in compliance and what kind of data you feed into the open ChatGPT engine versus what you might put inside your workflow solution. So those are considerations to keep in mind. So we did just supporting the point you were making, we tested two concepts. One is workflow assistant. This is just helping run an RTQ, just automating mechanical steps in sending out an RTQ and then compiling the results versus preparing. This is the AI as the intelligence assistant is looking at your current portfolio, looking at your RTQ and coming up with what we call portfolio insights.

(44:03):

So talking points that help you have that conversation. Prepare for that conversation in simple summary bullets and blurbs. And just when you ask advisors, which they find most valuable, they don't care as much about the information assistant, the workflow assistant, they care a lot about that intelligence assistant, which is because it summarizes a big complex activity that is preparation for a conversation and gives you information in a way that's, for lack of a better word, like talking points that make it easier and simpler to have a better quality conversation with the client rather than prepare in a hurry and have a less effective conversation with the client.

Audience Member 1 (44:46):

Yeah, I agree. And I would encourage people to think, and you may recall Maslow's hierarchy of needs that we all learned in Psychology 101 where you have this pyramid and at the bottom for Maslow is basic things like food and shelter. But if you apply how you can use AI to that pyramid structure, we have a lot of usage at the bottom level, which is pure automation or quick email writing. In the middle tier, you have your ability to do serious content writing and development of marketing, but at the top you have the strategic piece where you can engage it as a co thinker helping you try to get new insights on particular challenges. I think right now a lot of people are focused on the lower end, but because it's a general purpose technology, it can do all those things. It can help an advisor extract a table he wants to share from his clients from A PDF, but he can't get it out of the PDF.

(45:46):

And so he throws it into ChatGPT, and suddenly he has the table there. So that's a simple tactical thing all the way up to an advisor who's wanted to create a training program for their young advisors for years. But the idea of just getting started with thinking about this training program has always been such a huge cognitive burden that the person hasn't done it. But now you can engage the AI model with a strategic conversation about this training that you want to develop for your team, and you can get 80%, you can get that 80% done very quickly and suddenly you're over the hump and you can see how you can start executing this particular strategic task for your team in a very short amount of time.

Rachel Witkowski (46:30):

And we're going to be actually talking about some of those use cases in the encore rooms. There's going to be a few more demos of some really fantastic AI developers. I wanted to thank my panel so much for your insights and thank you everybody for being here. Thank you.