Author: Grow Intentionly
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In this month’s issue: the art of advisor branding, our new sales division, and talking bots.
The results from Advisor360’s 2024 Connected Wealth Report: AI and the Next-Gen Advisor reveal that industry participants are largely optimistic about the potential of AI to enhance their ability to serve clients better and do more with less. This month’s Connect360° newsletter contributors seem to agree.
Yes, AI is still new and largely unregulated, but the potential is clear. Routine workflows, everyday client admin tasks, and simple communications can be “delegated” to AI tools—with more robust responsibilities to follow once the industry has clearer controls and a better understanding of the evolving technology.
This month’s contributors—Melissa Thomas, Jim Frawley, and Darren Tedesco—offer their informed perspectives on how AI is transforming the advisor-client experience and what it may mean for the future of the industry.
AI can be a superpower
How will AI impact the client experience? Our contributors believe there are a multitude of possibilities, but the bottom line is that the effect will be significant.
Jim Frawley, CEO and Founder of Bellwether, says that AI can “anticipate client needs and be used to automate numerous administrative tasks.” This automation allows advisors to dedicate more time to fostering meaningful relationships with their clients and building their business.
Melissa Thomas, President of Advisor Brand Builder, agrees. “For advisors who leverage it correctly, AI can be a superpower,” she says. “It emboldens advisors with new and different abilities—and I’m not just talking about more intelligent and personalized investment allocations or data analytics. It’s also liberating them from many entrepreneurial and routine tasks critical to running a business, enabling them to focus on client connections.”
Frawley believes that AI improves “scale, speed and accuracy in a way that can make us almost superhuman. Pairing that with our unique human ability makes AI and advisor work a great match.”
“For the advisors who leverage it correctly, AI can be a superpower.”—Melissa Thomas
Data: The quiet hero
As our contributors point out, automating everyday workflows (so advisors can foster client relationships) is a key AI use case. Darren Tedesco, President of Advisor360°, believes “Data quality is paramount within that endeavor. In fact, if the data underlying AI is unreliable, the software itself is inherently flawed, making AI-automated client workflows less effective.”
Tedesco agreed that the right AI systems can certainly streamline processes, perform operational tasks, and reduce errors, “but it’s all for naught without a foundation of quality, holistic data. At the end of the day, AI and data quality go hand in hand—AI-generated insights are only as reliable as the data they’re drawn from,” he concludes.
“If the data underlying AI is unreliable, the software itself is inherently flawed, making AI-automated client workflows less effective, or much worse, outright dangerous.”—Darren Tedesco
When the superpower becomes kryptonite
We asked our contributors what negative effects and risks AI may have on advisors and enterprise wealth management firms.
Frawley believes AI does pose a threat to advisors, but only in certain cases. “Lower price point advice is being taken over by AI. Some clients are realizing that AI advice will suffice, with more data, info and less bias.” However, he continues, “at a higher price point, relationships matter much more—so AI is less of a threat at that level.” In other words, AI doesn’t replace the advisor-client relationship by any means.
“There are also potential security risks with any new technology,” says Frawley. “There aren’t enough controls in place yet; AI regulation will need to become routine in wealth management.”
Tedesco points out that, initially, AI technologies will require more human oversight. “For example, an advisor is unlikely to use ChatGPT or Bard to write a client newsletter and send it out without close review.” He went on to say that “AI-enabled actions can be ‘graduated’ by the home office or advisor.” In other words, “advisors will enable AI to manage more tasks and greater automation once the technology—and the data driving it—is proven to be valuable, consistent, and accurate.”
Never fear, advisors are here.
Our contributors were quick to say that AI won’t replace advisors—instead, it gives them tools they need to be more effective.
According to Frawley, “AI compiles information and allows advisors to be more creative.”
Thomas agrees, saying, “AI is an accelerant, not a replacement. Humans see nuance and can be guided by empathy, intuition, and a deep understanding of the emotion that drives most decision-making—that’s not something AI can deliver.”
He went on to say, “While there’s no disputing the potential and impact of artificial intelligence as a force multiplier in our space, and elsewhere in the world, there’s simply no substitute for emotional intelligence in relationships, financial or otherwise.”
“We see AI as an accelerant—not a replacement.”—Melissa Thomas
Please leave a comment and let us know how you enjoyed this conversation around AI. See what experts are saying about AI here.
About our contributors:
Jim Frawley is Chief Executive Officer and Founder of Bellwether. Jim and Bellwether build resilient organizations and people by helping them plan for and respond to change through bespoke executive coaching and customized workshops.
Melissa Thomas, localhost:10008/
Melissa Thomas is President of Advisor Brand Builder. Melissa is a branding and financial services marketing veteran who spends her days building high-impact brands, and driving product development for Advisor Brand Builder, an AI-enhanced technology platform revolutionizing the brand development journey for financial services firms.
Darren Tedesco is President of Advisor360° and has been part of our software development since its inception, bringing together the thinkers, creators, and visionaries that help power our clients’ productivity, profitability, and growth.
Welcome to the October 2023 issue of the Latest News in Financial #AdvisorTech – where we look at the big news, announcements, and underlying trends and developments that are emerging in the world of technology solutions for financial advisors!
This month’s edition kicks off with the news that custodial platform Altruist is eliminating the $1 per account monthly fee for its portfolio management and reporting technology for advisors on its platform, which on the one hand suggests that the economies of scale Altruist has achieved in the wake of its move to become a fully self-clearing custodian have been such that it can now afford to ‘give away’ its software, while on the other hand serves as an ominous sign for standalone portfolio management technology platforms that they could stand to be disrupted if more custodial platforms decide to compete on their technology offerings and eliminate the need for advisors to pay $5,000-$10,000 each year for a separate provider.
From there, the latest highlights also feature a number of other interesting advisor technology announcements, including:
- Holistiplan, after achieving success with its tax planning and analysis software, has announced an investment from Lead Edge Capital, signaling that it may be ready to expand into other financial planning areas beyond tax – but with a slew of new ‘Holistiplan for X’ startups in the marketplace, it may have a harder time repeating the exponential growth of its early years and as it seeks to fulfill the original ‘holistic’ aspirations of its founders.
- FMG Suite has acquired compliant texting solution MyRepChat to integrate into its full-service tech stack, underscoring the potential of text-based communication as a marketing tool – but also highlighting advisors’ challenges with integrating texting into their marketing and client communications workflows, as well as the fine line between texting as an effective communication method and one that’s disruptive and irritating to both the client and advisor.
- Investment analytics platform YCharts has launched a new feature for building and generating proposals for prospective clients, becoming the 2nd most popular analytics and recommendation tool this year (after Nitrogen’s rebranding earlier in 2023) to expand into the increasingly competitive category of sales enablement – underscoring the idea that as advisors use technology to provide more and more value for their clients, there’s increasing demand for tools that help advisors sell that value as well.
Read the analysis about these announcements in this month’s column, and a discussion of more trends in advisor technology, including:
- Brand design consultancy firm localhost:10008/ has launched Advisor Brand Builder, a tech-enabled service solution that automates much of the process of designing a unique advisory firm brand at a lower cost than a full-service branding process – showing how, when a provider 'tech-ifies' a service by automating everything possible and applying human expertise only when it's needed most, the resulting product can often be spun off and sold on a standalone basis.
- Testimonial IQ has launched the latest solution for advisors to gather and showcase client reviews and testimonials in the wake of the new SEC Marketing Rule – but it remains to be seen whether clients will let themselves be directed to a third-party site to leave a review, or if they’ll instead naturally gravitate towards the general sites (like Google and Yelp) that they already use to search for other businesses.
And be certain to read to the end, where we have provided an update to our popular “Financial AdvisorTech Solutions Map” (and also added the changes to our AdvisorTech Directory) as well!