We think AI is going to be a great disruptor, but what do financial advisors really think?
Of course, we get regular poll numbers from research sponsored by custodians and wealthtech providers, those polls usually find comfortable majorities of advisors… well, comfortable about their future with AI, but that doesn’t tell us much about how individual practitioners really feel, and why. So why not ask?
We talk a lot about wealth management around here, but probably not as much as we should to wealth managers themselves.
There’s really nothing quite like talking to an engaged financial advisor—and that’s why the profession will probably survive in some form for as long as there are people with wealth.
From an editorial perspective, we recognize that the voice of the advisor is something that has sometimes been lacking from our content, yet it is critical to any discussion of wealthtech—so we’re introducing a “We Asked” column to inject more wealth management voices into our coverage. Each week, we’ll ask a new wealthtech- or AI-related question directly to financial advisors using the FPA’s MediaSource and other tools at our disposal. We will always try to offer as many advisor responses to our questions as possible, with as little editing of those responses as possible.
This week, we asked “Are you concerned about AI disrupting wealth management and financial planning? Why or why not?”
Here are our responses, in alphabetical order:
Ursula Auger (CFP®)
Tobias Financial Advisors, Inc.
Fort Lauderdale, FL
As an advisor who has been in the industry for over 20 years, I believe Artificial Intelligence (AI) will likely disrupt wealth management and financial industries. The disruption will make the delivery of advice scalable with firms investing in tools that will make managing portfolios, reviewing estate plans, and providing tax planning easier and faster.
AI may enable a firm to serve clients with simpler needs and smaller portfolios (less than $1 million in investable assets) in a cost-effective manner. At first glance, the AI disruption of the financial planning industry may be concerning. I view using AI as an opportunity for advisors to level up. Using the tools to provide input into generating financial plans and tax saving ideas can free up advisors to think of innovative solutions for clients. For example, an estate planning tool to summarize trusts, wills, and other documents can save the advisor time in understanding key provisions and the flow of assets upon the client’s passing. The advisor can use the estate summary to think of ideas to protect the estate from creditors and mitigate estate taxes for a taxable estate over $30 million for a married couple.
When AI is used together with the knowledge that advisors accumulate over time, there is an opportunity for a firm to provide a holistic financial plan and implement the suggestions seamlessly. Technology integrating AI can help advisors flag portfolios that need trading to either rebalance to targets or harvest tax losses. Then, the portfolio management team can review the portfolios and trade with confidence.
Furthermore, having an AI notetaker that is customized for the wealth management industry and compliant with privacy laws can help the advisor connect with clients during meetings instead of focusing on taking notes. In turn, the AI notetaker may be capable of analyzing a client’s note history and provide insight to the advisor about specific concerns that need attention. Financial planning calls for building relationships and suggesting financial strategies that clients are comfortable implementing. AI cannot replace human judgement, accountability, or connection with clients.
Advisors who hone their communication skills to engage with their clients may uncover financial concerns, for example insufficient car insurance liability coverage, and provide solutions to address such. Sometimes AI tools will generate incorrect or outdated output. An advisor should carefully review an AI assisted presentation and correct any mistakes prior to presenting the solutions. As an advisor, I endeavor to use technology, including AI, as an enhancement to my knowledge to help individuals make informed decisions regarding their financial life.
Michael McMeans (CFP®)
Silverling Financial
Columbus, OH
Concerned is probably the wrong word. I am excited about the efficiencies it creates. The financial planning profession already has a problem of more people leaving the profession than coming into it. AI as a tool will scare some of the older group away even faster. But also, it’s not a zero-sum game.
If we attract potential clients with AI and help use AI to make their experience better, it will bring to the table potential clients who would have otherwise been DIY-ers. And if you’re a financial person hanging your hat on portfolio construction, you will become irrelevant if you’re not already. That’s not your value. Your value is managing personalities and being the head coach. If you’re making money doing anything less, I think you have reason to be worried.
Lauren Mireles
YeskeBuie
San Francisco, CA
AI may be able to crunch the numbers and give advice, but it lacks the human touch of a financial planner. A financial planner can look you in the eye, ask questions that help you uncover your personal values and money biases, and make recommendations that align with who and what matter most to you.
Financial planning is a relationship business, and though AI is becoming remarkably good at engaging with people, real financial planners bring a quality of genuine care, intellectual and emotional awareness, and comprehensiveness that I’m not sure can be fully replicated.
These tools are excellent resources – we currently use AI in limited capacities and continue to explore opportunities to enhance efficiency at our firm. That said, we’ve seen gaps and errors in its output that make human review essential to ensure accuracy. For someone navigating financial decisions without a planner, those gaps carry real risk, especially given how little regulatory oversight currently governs the technology. So while I don’t see the AI disruption as something to fear, I do see it as something to watch carefully and to meet with intention.
Marcos Segrera (CFP®)
Evensky & Katz Wealth Management
Coral Gables, FL
This is from Antonio Damasio’s book Descartes’ Error – “We are not thinking creatures who feel. We are feeling creatures who think.”
We serve people not portfolios and people have emotions and competing goals. At the intersection of high-cost mistakes and those intense emotions lies a “perfect storm” where human psychology often overrides rational decision-making, leading to regret and further financial or personal loss. We (wealth managers and financial planners) reside at that intersection. That is my belief.
The clients that get the most out of us and are built to engage us, are what I would call thoughtful delegators. These ai tools will be loved by the DIY folks and advisors alike since it will hopefully let us spend more time in conversation instead of a spreadsheet. Said another way, ai is going after a part of the market that wasnt the best fit for us to begin with (DIY). Next question, when does ai begin to take a portion of the thoughtful delegator market? Not yet.
Lillian Turner (CFP®, CSLP®, RLP®)
Daring Greatly Wealth
Scottsdale, AZ
Controversial opinion here, but I hope AI does disrupt the wealth management industry, because we need a serious shake up. There are so many financial advisors still operating in the old school way of giving guidance – one that focuses purely on the technical and completely ignores the unique, complex, human element of planning, which I’d argue is ten times more impactful.
If we’re eventually able to outsource the investment management, tax planning, and Monte Carlo retirement planning analyses to AI, it frees us up to facilitate much deeper transformation within our clients and provide more customized support. My hope is that AI encourages financial planners to focus on serving the actual human in front of them, and not just their investment account.
Mitzie Wilson (CFP®,SE-AWMA®,RICP®)
Farther
Atlanta, GA
AI could and should be our friend. It’s a good thing for people to ask questions and do research. However, the bottom line is that AI will never get to know you or your family. It’s the same as the medical field – you can do your research, but is AI going to be your Doctor? I don’t think so.
