How to Actually Use AI in Wealth Management

Speaker: 00:00:12

Go

2

: 00:00:18

video1742168322: Hello everyone, and

welcome to Zephyr's Adjusted for Risk

3

: 00:00:21

podcast from the shores of Lake Tahoe.

4

: 00:00:24

I'm Ryan Nauman, the market

strategist here at Zephyr.

5

: 00:00:27

Over the past couple of years,

the wealth management space

6

: 00:00:30

has been grappling with AI.

7

: 00:00:33

First, it was understanding what AI is.

8

: 00:00:37

Now, it is all about how to implement it

to help enhance the advisor experience.

9

: 00:00:44

Well, I have on an industry expert

who's going to share his thoughts

10

: 00:00:49

on the impact AI is having on wealth

management and the opportunities that

11

: 00:00:53

AI presents to financial advisors.

12

: 00:00:57

But first, today's episode is sponsored

by the award-winning Zephyr, which

13

: 00:01:01

helps investment professionals

make more informed investment

14

: 00:01:05

decisions on behalf of their clients.

15

: 00:01:07

All right, enough from me.

16

: 00:01:09

I have already talked enough.

17

: 00:01:11

Let's go ahead and move on to the

star of the show I'd like to give a

18

: 00:01:16

very warm welcome to Mohan Gurpakiam.

19

: 00:01:20

Mohan is the Chief Information

Officer at Steward Partners.

20

: 00:01:25

Mohan, thank you so much for

coming on the show again.

21

: 00:01:28

You were on the show, we were

live at the Edge Conference the

22

: 00:01:33

last time you were on the show.

23

: 00:01:34

We had a fantastic conversation, so

I'm really looking forward to this one.

24

: 00:01:38

A lot has changed in a year, so

there's a lot to, uh, discuss.

25

: 00:01:44

So thank you.

26

: 00:01:45

It's an honor to have you back on.

27

: 00:01:47

Can you please tell us a little bit more

about yourself and Steward Partners?

28

: 00:01:51

Absolutely.

29

: 00:01:52

So Ryan, first of all, thank you

for having me back on this channel.

30

: 00:01:55

I greatly enjoyed our conversation

last year when we met in Boca.

31

: 00:01:59

Uh, what a terrible place.

32

: 00:02:01

But here we are again to talk

about a very timely topic.

33

: 00:02:05

Let me start off with Steward Partners.

34

: 00:02:07

Steward Partners is an employee-owned

full service independent partnership.

35

: 00:02:12

We cater to family, institutional,

multi-generational investors.

36

: 00:02:18

Our partners specialize in comprehensive

wealth planning, investment strategy,

37

: 00:02:23

and professional asset management.

38

: 00:02:25

Uh, we serve in a, a large clientele.

39

: 00:02:28

We pride ourselves on delivering,

you know, personalized service

40

: 00:02:33

with commitment to excellence.

41

: 00:02:35

We operate in more than 30 states and

roughly around 90 different offices.

42

: 00:02:39

So that's who Steward Partners is.

43

: 00:02:42

Um, a- about me, I've been…

44

: 00:02:44

My name is Mohan Gurpakiam.

45

: 00:02:46

I've been in the industry

for close to 30 years.

46

: 00:02:48

My experience spans all the way

from direct to consumer, you know,

47

: 00:02:54

uh, wealth management at scale.

48

: 00:02:57

I worked at E-Trade for a long time.

49

: 00:02:59

I also understand the independent

broker-dealer business where I

50

: 00:03:03

was the, uh, chief technology

officer at Cetera Financial.

51

: 00:03:06

And then I ran both management at

AssetMark, and I've been with, uh,

52

: 00:03:10

Steward Partners for the last three and

a half years as our chief information

53

: 00:03:15

officer, and it's a fantastic place.

54

: 00:03:18

I cannot say enough

about Steward Partners.

55

: 00:03:21

But that's me.

56

: 00:03:22

Uh, you know, I'm aging myself,

but, uh, three, um, close to

57

: 00:03:26

three decades in the industry.

58

: 00:03:27

I've seen several reincarnations of

this industry and, um, and we're seeing

59

: 00:03:32

one in, in, uh, real life right now

as we, as we are watching through it.

60

: 00:03:39

Yeah.

61

: 00:03:39

Mohan, that's fantastic, and I have

had the privilege of speaking with

62

: 00:03:45

a few other folks at, from Stewart

Partners, from, uh, Jim Gold and Jeff.

63

: 00:03:50

Great team.

64

: 00:03:51

A lot of great people at Stewart Partners.

65

: 00:03:53

It's always a pleasure speaking with them.

66

: 00:03:55

I've always enjoyed it.

67

: 00:03:57

And you are exactly right on

the AI side, technology side.

68

: 00:04:01

It's amazing how the space has evolved so

quickly and just over the past few years

69

: 00:04:08

and just, uh, I think it, it's moving so

quickly, and we talked about it last week.

70

: 00:04:14

Like, just there, there's still so much

uncertainty, and I think a lot of it has

71

: 00:04:19

to do with just how quickly technology

is evolving and changing the space.

72

: 00:04:24

It adds uncertainty and, and just adds

more plate to the financial advisor, and

73

: 00:04:28

we're gonna get on into that shortly.

74

: 00:04:30

But, you know, the people in the wealth

management space have now had a couple

75

: 00:04:35

of years to digest what AI really

means for the wealth management space.

76

: 00:04:41

Do you feel there's been a transition

here on how wealth management firms

77

: 00:04:46

and more specifically financial

advisors view and think about

78

: 00:04:50

AI from last year to this year?

79

: 00:04:52

Have we shifted in our mindset?

80

: 00:04:55

I, I would, I would say yes.

81

: 00:04:57

There has been a clear and, uh, I would

say a measurable shift from, I would

82

: 00:05:03

say, over the last 18, 24 months, right?

83

: 00:05:05

I think 24, two- 2024 and 2025, there

was more of, I would say, curiosity

84

: 00:05:13

c- you know, along with skepticism.

85

: 00:05:16

I would say we were more, more in the

experimentation phase, or people were,

86

: 00:05:21

you know, uh, using isolated use cases.

87

: 00:05:24

Oh, should I use it for meeting summaries?

88

: 00:05:27

Uh, there was also a lot of hesitation

from, uh, compliance, right?

89

: 00:05:32

Because the regulations usually

catch up with advances in technology,

90

: 00:05:36

especially when technology is

advancing at a much faster pace.

91

: 00:05:41

And there was minimal

integration into core workflows.

92

: 00:05:46

Uh, fast forward 18 months, 24

months, when I speak to a lot of

93

: 00:05:50

our industry peers, um, I think they

have gone from this curiosity phase.

94

: 00:05:55

You know, they have moved away from

the question of, is AI useful, to

95

: 00:06:00

more like, how can I scale it safely?

96

: 00:06:03

Right.

97

: 00:06:04

It is about an acceptance, it's

about operationalization, and

98

: 00:06:09

more importantly, it's a strategic

priority for a lot of organizations.

99

: 00:06:12

There is a mindset gap.

100

: 00:06:14

People have moved away from pilots

to production, uh, to a strategic,

101

: 00:06:20

um, I would say, v-view of AI, and

the governance is also catching up.

102

: 00:06:26

So at all fronts, the answer is

yes, clear and measurable shift from

103

: 00:06:31

last year to this year, I would say.

104

: 00:06:34

Yeah, I completely agree, and just a

mindset and people, I think, are realizing

105

: 00:06:41

they understand what is, and just now

it's like, okay, it can really help us,

106

: 00:06:46

whether it's just a AI agent chatbot

to now making more efficient workflow.

107

: 00:06:53

And, and the firms out there, technology

for AI firms are just helping, you know,

108

: 00:06:58

give financial advisors more options

on implementation and how to do it.

109

: 00:07:03

So how-- speaking of that and the

people that you talk to, your, um,

110

: 00:07:07

colleagues, whether it's at Steward

or maybe just, um, other people in the

111

: 00:07:11

industry, how are firms implementing

AI to enhance that advisor experience?

112

: 00:07:17

Is it just mostly on the, you know,

chatbot support, or are they getting

113

: 00:07:22

more on the operational side?

114

: 00:07:25

I would say that would have been the

case, like, uh, like 18 months ago.

115

: 00:07:29

But I, if, if I walk into a room today,

and, uh, I would say that advisors

116

: 00:07:36

are actually looking at AI as part

of their daily operating system.

117

: 00:07:42

And, uh, the, the best example

I would give is, you know,

118

: 00:07:45

using something like, say, um,

Microsoft Word and Microsoft Excel.

119

: 00:07:50

I think AI is going to be

something similar to that.

120

: 00:07:52

It's core part of your, core

part of your operating system.

121

: 00:07:56

And what I have heard from a lot of our

peers and our partners within Steward,

122

: 00:08:01

uh, we use our-- uh, I would say not we.

123

: 00:08:05

The advisors are using AI as part of

their operating system, and it varies

124

: 00:08:10

all the way from meeting prep, meeting

automation, things like tasking.

125

: 00:08:15

This is a, something-- This is a function

I would say the advisors spend a lot

126

: 00:08:20

of time on, almost on a daily basis.

127

: 00:08:22

There are also, I would say, you know,

two or three other big use cases.

128

: 00:08:27

Uh, opportunity identification, whether

it's, you know, uh, new life events,

129

: 00:08:32

additional products, tax strategies.

130

: 00:08:35

So that is a, another place where

AI is being used extensively.

131

: 00:08:40

Uh, communication and content.

132

: 00:08:42

Uh, this is actually become a lot more

commonplace, extensive use of AI for

133

: 00:08:48

drafting emails or adjusting the tone.

134

: 00:08:52

And we have also seen automation

of, uh, non-value work.

135

: 00:08:56

Uh, I want to move my file that comes

in via email into a file repository.

136

: 00:09:00

That's a good example.

137

: 00:09:01

So these are like use cases we are already

seeing being used quite extensively in a,

138

: 00:09:07

across this, in a wealth management space,

irrespective of the size of the practice.

139

: 00:09:13

Mm-hmm.

140

: 00:09:14

No, those are great examples, and I just-

Feel, Mohan, that we're just on the tip

141

: 00:09:19

of the iceberg right now on different ways

AI is gonna be used in advisory practices.

142

: 00:09:26

And you brought up a very good point, too,

about if-- We all know wealth management

143

: 00:09:32

is a very highly regulated industry.

144

: 00:09:36

Like, wha-how is, you know, regulatory

comp-uh, compliance gonna handle AI, too?

145

: 00:09:42

Especially when we start doing

more with AI and investment

146

: 00:09:45

management and recommendations.

147

: 00:09:48

Like, that I feel as if we're still

haven't even really reached yet.

148

: 00:09:53

Is that correct?

149

: 00:09:55

That is correct, yeah.

150

: 00:09:57

Yeah.

151

: 00:09:57

Do you think some firms are missing

the point or missing the most important

152

: 00:10:02

aspect of AI when trying to implement it?

153

: 00:10:05

Maybe they're just focusing too much on

communication part or, you know, reading

154

: 00:10:10

maybe, uh, the output of a deliverable

and putting it into summary notes.

155

: 00:10:16

Or do you think their advisories

and firms are missing the point?

156

: 00:10:20

Or, and really, what is the

most important aspect of AI?

157

: 00:10:24

I, I think it is a very--

it's a fantastic question.

158

: 00:10:26

First of all, it's, uh, you know,

the, the industry is a very h-human

159

: 00:10:32

touch, high touch industry, right?

160

: 00:10:36

And I think this is one of the

most underrated and under-discussed

161

: 00:10:41

dynamics right now, right?

162

: 00:10:44

I think the m-most important question

you gotta ask is, what is the

163

: 00:10:47

advisor's role in a AI world, right?

164

: 00:10:50

AI is not going to replace advisor, right?

165

: 00:10:54

I think that is the

biggest misunderstanding.

166

: 00:10:58

You have to still put the, uh, the

human in the loop, human in the middle

167

: 00:11:01

kind of a, you know, architecture,

business architecture when you

168

: 00:11:06

start off with implementing or

thinking of implementing AI, right?

169

: 00:11:11

That I would say is something that

most of the firms actually do not think

170

: 00:11:16

of putting the human first when you

develop a AI-based operating system.

171

: 00:11:22

So that's number one in my mind.

172

: 00:11:24

The second thing that people do

is ignore the data foundation.

173

: 00:11:29

Problem.

174

: 00:11:30

I, I always try to use a simple analogy.

175

: 00:11:35

Using a AI, uh, to build an

operating system is like building

176

: 00:11:39

the twentieth floor in a building.

177

: 00:11:42

You can't build the

twentieth floor straight up.

178

: 00:11:44

You gotta build nineteen floors

underneath to basically get the

179

: 00:11:47

twentieth floor up and running, right?

180

: 00:11:50

So ignore the data foundation problem.

181

: 00:11:53

I think that's a big issue, you

know, whether it's fragmentation,

182

: 00:11:57

especially the disconnected tools.

183

: 00:12:00

And there is a lot of unstructured data.

184

: 00:12:02

You know, take CRM, for example.

185

: 00:12:04

It's highly unstructured data, right?

186

: 00:12:06

And the third thing that-- This

is actually a very common mistake.

187

: 00:12:10

When I talk to people and they say

like, "Hey, do you have a AI strategy?"

188

: 00:12:15

A lot of times they talk

about bolt-on AI, right?

189

: 00:12:19

That is not really a AI strategy, right?

190

: 00:12:22

Um, I would say the industry has to

move away from using bolt-on AI to,

191

: 00:12:28

how can I transform my core workflows?

192

: 00:12:32

Introducing a tool is

be-- it becomes a novelty.

193

: 00:12:35

Is it a real productivity multiplier?

194

: 00:12:39

That is a question that,

you know, firms have to ask.

195

: 00:12:42

What is going to become a productivity

multiplier when I introduce AI, right?

196

: 00:12:49

That's a good question to ask, but

also the more important one is,

197

: 00:12:53

put a human in the middle, right?

198

: 00:12:53

Ask, ask the question, how is AI

going to supplement the human in

199

: 00:13:00

the middle?

200

: 00:13:02

Yeah, Mohan, that is such a good point.

201

: 00:13:04

And going back to, you know,

your, uh, comments regarding

202

: 00:13:09

that, you're exactly right.

203

: 00:13:11

AI is not gonna replace the advisor.

204

: 00:13:14

It's gonna, like you said, supplement

the advisor and help the advisor, I feel.

205

: 00:13:20

But-- And I also love that you brought

up, you know, we often talk in this

206

: 00:13:24

industry, we always wanna get to the

20th floor or wherever really quickly.

207

: 00:13:29

We often forget about the planning

and how important planning is in that

208

: 00:13:35

foundation of building something.

209

: 00:13:37

You need to build the foundation of

a house first before you can, you

210

: 00:13:42

know, start building the kitchen.

211

: 00:13:44

So w- are there other obstacles?

212

: 00:13:48

You mentioned data, how important data is.

213

: 00:13:50

Are there other obstacles to implementing

AI you're coming across when firms wanna

214

: 00:13:56

implement AI, but they're, you know…

215

: 00:13:59

Or they have, but they missed a

step, such as building a foundation?

216

: 00:14:03

I think first of all, you

know, data is the place.

217

: 00:14:06

You know, people always

miss that step, right?

218

: 00:14:10

Especially when you walk into complex

practices, you have to aggregate

219

: 00:14:16

data across so many sources.

220

: 00:14:19

Not just custodian, but also across

your direct business, insurance,

221

: 00:14:23

annuities, you name it, right?

222

: 00:14:26

And being able to get all this data,

have, uh, proper classification,

223

: 00:14:31

taxonomy, that's important, and usually

takes a long, long time and quite a

224

: 00:14:37

bit of engineering effort in that.

225

: 00:14:40

But that's not the only

impediment that I could think of.

226

: 00:14:44

The other one that I would say is

the risk and regulatory uncertainty.

227

: 00:14:51

Like, regulations usually, you know, are

catching up to reality, especially when

228

: 00:14:57

the technology is advancing so fast.

229

: 00:14:59

The, um, the average time for

a, a LLM model to be, I would

230

: 00:15:05

say, uh, replaced with a newer

version is four months, right?

231

: 00:15:11

So there is, uh, you know, think about

like, you know, when, um, you know, Int-

232

: 00:15:16

Intel CEO said, "Oh, the processing power

is going to increase every 18 months."

233

: 00:15:20

We are talking about four months.

234

: 00:15:22

It's, it's a very highly compressed,

you know, changing environment.

235

: 00:15:26

So risk and regulatory uncertainty,

if you don't have clarity, most of

236

: 00:15:32

the firms are going to resort to the

most conservative approach, which

237

: 00:15:37

allows for, uh, not a whole lot of

experimentation, so to say, right?

238

: 00:15:42

So that's, I think, also

a big, uh, obstacle.

239

: 00:15:46

The other one that is- We, we don't

really think about it that deeply.

240

: 00:15:50

It's about advisor trust and, more

importantly, behavioral resistance, the

241

: 00:15:56

change management aspect of a practice.

242

: 00:16:00

Most of the advisors, their offices,

they have built-- they have perfected an

243

: 00:16:05

operating system that meets their needs

over the last fifteen, twenty years.

244

: 00:16:10

That change management

is going to be difficult.

245

: 00:16:13

It has to be measured.

246

: 00:16:14

It, it requires coaching.

247

: 00:16:16

Uh, so that is actually another

impediment that I have seen.

248

: 00:16:21

Uh, the other one is something that

we have seen especially with larger

249

: 00:16:26

established firms which actually

have legacy architecture, right?

250

: 00:16:30

And this is an interesting one because

we see medium-sized firms that are in the

251

: 00:16:36

sweet spot between, like, they have newer

architecture, they can move faster, move

252

: 00:16:40

things, push things a lot faster, right?

253

: 00:16:42

So the legacy architecture and the

integration debt is an impediment, right?

254

: 00:16:48

Especially when we are talking

about, um, implementing an, you

255

: 00:16:53

know, a, an organization-wide core

operating system that's AI native.

256

: 00:16:59

That becomes a bigger challenge.

257

: 00:17:01

And last but not the least,

talent and change management gap.

258

: 00:17:05

Uh, technology guys, we struggle.

259

: 00:17:08

I cannot go to the, you know, market right

now to find, you know, prompt engineers.

260

: 00:17:13

There are very few.

261

: 00:17:13

Forget about prompt engineers.

262

: 00:17:15

Try getting a, a, uh, training program,

right, for your, for your organization.

263

: 00:17:21

There is very little, you

know, uh, talent actually.

264

: 00:17:26

The talent usually takes a lot

of time to catch up, right?

265

: 00:17:30

And I think that is another area

where we are all struggling.

266

: 00:17:34

As technology leaders, we struggle

to find the right, um, talent to

267

: 00:17:39

basically meet our immediate needs.

268

: 00:17:42

I think two years from now, it'll be

a different situation, but right now,

269

: 00:17:46

we are in a place where the demand

far outstrips supply at this point.

270

: 00:17:53

Yeah, Mohan, those are great points.

271

: 00:17:55

And going back, I love

that you brought up trust.

272

: 00:17:58

As we know, this industry

really is built on trust.

273

: 00:18:01

If you have the trust of your

clients as a financial advisor,

274

: 00:18:04

you can be very successful.

275

: 00:18:07

I-- when I use AI for research,

I'll be honest with you, I

276

: 00:18:12

still don't trust some of it.

277

: 00:18:14

I will end up, I end up spending more

time double-checking the numbers, the

278

: 00:18:19

returns, the analytics that AI produces,

you know, gives me from a prompt.

279

: 00:18:24

I'll go research and then it's like,

"I should have just done this on my

280

: 00:18:27

own," because it took me more time.

281

: 00:18:30

Uh, and ninety-nine point

nine percent of the time, the

282

: 00:18:34

AI-generated response was correct.

283

: 00:18:37

But there it is.

284

: 00:18:38

It's all about trust.

285

: 00:18:39

I, I'm still trying to trust it

when I create, um, you know, prompt

286

: 00:18:46

it for some research and so on.

287

: 00:18:47

And with that being said too, and going

back to your education, I do use AI

288

: 00:18:53

quite a bit, but it's am I asking it the

right prompt or am I being clear enough?

289

: 00:19:01

'Cause I don't know.

290

: 00:19:02

I, I'll do…

291

: 00:19:03

And I always ask please and

thank you and all that stuff

292

: 00:19:06

like I'm talking to somebody.

293

: 00:19:07

I probably don't need to, but we

do it, and it, it's those things

294

: 00:19:12

that, yes, we need more training

because I'm sure my prompts could

295

: 00:19:15

get better, and then the trust.

296

: 00:19:17

I'm so glad you brought those up

But, um, you know, where can AI

297

: 00:19:23

have the biggest impact within

a wealth management practice?

298

: 00:19:26

You know, as our viewers know, you know,

I focus more on the investment management.

299

: 00:19:31

I would love it if we had an AI tool

that, uh, said, "Create an optimized

300

: 00:19:37

portfolio that gives me the largest

sharp ratio across these asset classes.

301

: 00:19:43

Include all these asset classes,

produces a efficient frontier."

302

: 00:19:46

Boom.

303

: 00:19:47

That's how I think.

304

: 00:19:49

But are there other, you know, areas

within the wealth management practice

305

: 00:19:53

that can have the biggest impact?

306

: 00:19:55

You know, we talked about chat,

um, you know, the chatbot.

307

: 00:19:58

Is there anything else there

that you're thinking of?

308

: 00:20:02

Absolutely.

309

: 00:20:02

So first of all, I want to start

off with the, the one that you

310

: 00:20:06

brought up, investment, um, you

know, research, investment prep.

311

: 00:20:11

Unfortunately, that's not an

area where, you know, there

312

: 00:20:15

is not widespread adoption.

313

: 00:20:17

Even among advisors who use AI

extensively, only 7% of them use

314

: 00:20:22

it for the, um, investment research

and portfolio construction.

315

: 00:20:27

Part of it is actually ha- I think it

has to do with the, the trust factor, and

316

: 00:20:32

it, it, it's going to take time, right?

317

: 00:20:34

But coming back to biggest impact

in terms of, uh, within and with

318

: 00:20:40

management practice, I would say the

first one we should start off with

319

: 00:20:45

is advisor productivity and capacity.

320

: 00:20:48

There are a couple of reasons.

321

: 00:20:49

Number one, um, that's time,

you know, I would say, that's

322

: 00:20:54

spent almost on a daily basis.

323

: 00:20:57

The most amount of time spent

by an advisor is around, you

324

: 00:21:00

know, things like meeting prep,

meeting the clients, automated

325

: 00:21:04

com-compliance, call to actions, right?

326

: 00:21:08

Um, and it-- this is also

about, you know, the capacity.

327

: 00:21:12

You know, there's a well-established

study by McKinsey that says, "Oh, in

328

: 00:21:17

the next ten years, we are gonna have

100,000 advisors shortage," which is true.

329

: 00:21:21

We don't see a lot of, uh,

fresh, I would say, supply of

330

: 00:21:26

labor coming into the industry.

331

: 00:21:27

So I think AI is probably going to

address a good chunk of, I would

332

: 00:21:32

say, the shortfall that you expect.

333

: 00:21:34

I don't think it'll be uncommon

to see, you know, a billion or $2

334

: 00:21:39

billion advisor practices in the

future because AI could automate a

335

: 00:21:44

lot of the low-value work, right?

336

: 00:21:47

Um, there are a couple of

other areas, I would say.

337

: 00:21:50

Uh, client engagement,

uh, proactive advice.

338

: 00:21:53

Um, one of the things that when I talk

to advisors, they always talk about

339

: 00:21:59

what they call their morning routine.

340

: 00:22:01

They're like, "Oh, I come in, walk into

the office, get my cup of joe, and I do

341

: 00:22:06

the same thing, which is I go try and

pull 10 reports to figure out what are

342

: 00:22:12

the five things I need to focus on, and

that's going to take me two hours," right?

343

: 00:22:16

So it's interesting, the advisors

basically spend the first two hours

344

: 00:22:20

trying to figure out what they're gonna

work on for the next two hours, right?

345

: 00:22:25

So one of the things the advisors

have said is like, "We want

346

: 00:22:29

event-triggered," I would say,

"notification or advice from the system."

347

: 00:22:35

Right.

348

: 00:22:36

Um, they expect when they walk in,

there is a screen that says, "Hey,

349

: 00:22:41

ten accounts received cash yesterday.

350

: 00:22:43

Do something about it.

351

: 00:22:45

Uh, five accounts submitted

their account paperwork.

352

: 00:22:47

Three of them are not in good order."

353

: 00:22:49

Right?

354

: 00:22:50

Or like, oh, there is like, you

know, cash that came into IRA account

355

: 00:22:54

which requires a rollover, right?

356

: 00:22:56

And I think that is an example of

like, you know, where advisors want

357

: 00:23:00

event-triggered advice or, you know,

they want a notification saying,

358

: 00:23:05

"By the way, that client is hitting

the age limit for RMD," right?

359

: 00:23:10

So this is a good example.

360

: 00:23:12

If I wa- you know, en- envision how

the, you know, advisor screen is going

361

: 00:23:16

to look like in the next few years.

362

: 00:23:18

You're gonna walk in, there's gonna be

like ten agents, and these ten agents

363

: 00:23:22

are basically gonna say, "Hey, these

are the things you need to do", which

364

: 00:23:25

is probably going to automate a good

eighty percent, ninety percent of all of

365

: 00:23:31

your notifications and actions, right?

366

: 00:23:33

The other area that is not, you

know, uh, discussed very widely

367

: 00:23:37

is around workflow automation.

368

: 00:23:40

One of the bigger, I would say, complaints

if you ask the advisors is a friction

369

: 00:23:45

between the advisor's practice and

the operational back offices, right?

370

: 00:23:51

Reducing the operational burden,

re-reducing the cost to serve is mutually

371

: 00:23:56

beneficial for both the advisors and

firms like us because it reduces the

372

: 00:24:03

friction or eliminates the friction

and improves productivity vastly.

373

: 00:24:08

So these are, I would say, three

areas where you can have a really

374

: 00:24:12

big impact for the advisor's

practice on a day-to-day, uh, basis.

375

: 00:24:18

Yeah, I agree.

376

: 00:24:19

I can't wait for when I come in

because you-- It, it hits home when

377

: 00:24:26

you said it takes basically two

hours of me to plan what I'm gonna

378

: 00:24:30

be doing for the next two hours.

379

: 00:24:32

That's exactly what I do.

380

: 00:24:33

I wake up, sit here, and it's

like, "Okay, what am I gonna do?"

381

: 00:24:36

You know?

382

: 00:24:36

It's like two hours later, it's

like, "Oh, I finally figured it out."

383

: 00:24:41

Um, just there's only so

much time in the day, Mohan.

384

: 00:24:46

So if we can leverage AI to make it

more efficient, it helps everyone.

385

: 00:24:53

So, you know, can you-- all our

listeners out there, the financial

386

: 00:24:57

advisors who are still uncertain about

AI and the implementation, like we

387

: 00:25:03

said at the be- it's moving so quickly.

388

: 00:25:05

Y-your head is spinning, analysis.

389

: 00:25:07

Y-you, you don't know where to start.

390

: 00:25:10

You know you need to do

it, you just don't know…

391

: 00:25:12

Can you provide some tips to financial

advisors who are still uncertain?

392

: 00:25:16

They want to, just don't

know where to get started.

393

: 00:25:19

Um, a good example I would

use is think of an AI-based

394

: 00:25:24

operating system as a large pizza.

395

: 00:25:27

You're gonna eat one

slice at a time, right?

396

: 00:25:30

You have to always start small.

397

: 00:25:32

If you try to think of like, oh, how

would AI change my practice en-entirely?

398

: 00:25:41

Uh, well, it's going to take you like

eight, 12 months to figure that out.

399

: 00:25:45

The industry would have moved on, right?

400

: 00:25:47

Um, the best advice I would tell

is, you know, start small Identify

401

: 00:25:52

a good return on investment.

402

: 00:25:56

Ask the very simple question,

where am I losing time every day?

403

: 00:26:02

Right?

404

: 00:26:02

Rather than trying to bolt on something.

405

: 00:26:04

You know, and that changes or that

differs from practice to practice, right?

406

: 00:26:10

If you are, um, probably in a practice

that has fewer number of large

407

: 00:26:16

clients, your needs might be very

different from a practice that have

408

: 00:26:21

larger number of small clients, right?

409

: 00:26:24

It's, it's where you spend time

depends on what your practice is.

410

: 00:26:28

When they-- when we say you talk to one

advisor, you talk to one advisor, right?

411

: 00:26:32

Every advisor is unique.

412

: 00:26:33

So I think that's the

best advice I would say.

413

: 00:26:35

You know, start small, identify

a good return on investment.

414

: 00:26:39

You know, solve the problem, take the win.

415

: 00:26:42

You know, start thinking about how

would AI change my next few hours of

416

: 00:26:46

my time, versus start thinking about,

oh, how is it going to change the

417

: 00:26:51

entire wealth management practice.

418

: 00:26:53

You cannot control what you cannot

control, but you can control the ones that

419

: 00:26:57

are in your immediate sphere of, I would

say, control, which is, hey, what can I…

420

: 00:27:05

You know, where can I save time today?

421

: 00:27:08

Like, what are the activities I can

now, you know, uh, automate, right?

422

: 00:27:11

That's the, that's the way I would

think about, um, implementing AI.

423

: 00:27:18

That is such a great point, because I

think it can be overwhelming to some.

424

: 00:27:23

And like you said, don't try and chew

off more than that piece of pizza.

425

: 00:27:26

Just take one slice at a time.

426

: 00:27:28

No reason to, you know, try and

revamp your whole practice right away.

427

: 00:27:34

And I love that advice there, Mohan.

428

: 00:27:37

That's really good.

429

: 00:27:37

Just focus on one piece at a time.

430

: 00:27:41

Where are you spending more

time than what you should?

431

: 00:27:43

Can you make that process more efficient?

432

: 00:27:45

Great, great thoughts there.

433

: 00:27:47

Do you think there is some advisor

fatigue when it comes to technology?

434

: 00:27:51

We've been talking about technology

for years, how it's evolved,

435

: 00:27:55

all the different tech stacks,

how important a tech stack is.

436

: 00:27:59

Do you think there's

some fatigue going on?

437

: 00:28:01

Hundred percent, right.

438

: 00:28:02

I think it's a…

439

: 00:28:03

Advisor technology fatigue

is very real right now.

440

: 00:28:08

I would go to Kitces', um, you know,

fintech roadmap Like 10 years ago, I

441

: 00:28:14

could have printed it on an A4 size paper.

442

: 00:28:17

Now, if I want to print the, the,

in a fintech, uh, ecosystem, I have

443

: 00:28:22

to go to Kinko's and print it out

on a, you know, huge plotter, right?

444

: 00:28:26

There has been an explosion in

terms of the fintech products.

445

: 00:28:30

A lot of those were, you know,

came in along with the evolution

446

: 00:28:34

of cloud-based services, which

is the dominant model right now.

447

: 00:28:39

It lowered the entry barrier

significantly, which is fantastic.

448

: 00:28:43

Lot of great ideas have come to fruition.

449

: 00:28:46

But the system, the ecosystem

is just exploding, right?

450

: 00:28:51

I think, um, we call it the tool

overload or the stacks sprawl, right?

451

: 00:28:57

It just, you know, uh, like five

years ago, or even like 10 years

452

: 00:29:02

ago, I could fit my tech stack

on, like, a single page of paper

453

: 00:29:06

and say, "This is what I support."

454

: 00:29:07

Now, it's like multiple

sheets of paper, right?

455

: 00:29:10

So I think that is a real problem, right?

456

: 00:29:13

And I think, well, the other thing

that is also something you have

457

: 00:29:18

to consider is a constant change,

sometimes with questionable payoff.

458

: 00:29:24

You know, what- We have to factor in,

uh, heavily into this conversation

459

: 00:29:30

is the learning curve for the

advisors, their practices, right?

460

: 00:29:36

The lowest level of every

organization needs to be familiar

461

: 00:29:41

with any platform that we bring in.

462

: 00:29:43

The disruption it causes

to existing practices.

463

: 00:29:47

And a lot of times it's

a limited benefits.

464

: 00:29:49

When, when the systems and the

tools have been exploring, the

465

: 00:29:54

marginal increase in benefits

becomes smaller and smaller, right?

466

: 00:29:59

And it raises a question in the

minds of the advisor, right?

467

: 00:30:04

Is it worth that change when the

marginal benefit is limited, right?

468

: 00:30:10

And sometimes we have

to bring in innovation.

469

: 00:30:14

However, it has to be a balance

between, you know, understanding,

470

: 00:30:19

like, what is beneficial to my

organization, and is it worth the

471

: 00:30:23

disruption it's going to cause, and am

I committed to making it successful?

472

: 00:30:28

I think those are the questions that-

Mm … leaders like us grab and say,

473

: 00:30:32

"Hey, how do I solve that problem?"

474

: 00:30:35

But the advisor fatigue, technology

fatigue is very real right now.

475

: 00:30:41

Yeah, I think so too.

476

: 00:30:43

It's hard now to have a conversation

that d- in this space that doesn't evolve

477

: 00:30:47

around technology or AI doesn't come up

at some point during that conversation.

478

: 00:30:54

Lastly, Mohan, great conversation.

479

: 00:30:57

Real quick, you know, in this space

because of technology, there's a lot

480

: 00:31:01

of elements within wealth management

that are becoming commoditized,

481

: 00:31:04

whether it's investment management,

all the different ETFs out there.

482

: 00:31:09

You can get, go online and get

a lot of analytics for free.

483

: 00:31:13

It's being commoditized.

484

: 00:31:14

Is there something that can give firms

a strategic advantage moving forward,

485

: 00:31:19

kind of separate themselves apart

that maybe they're not thinking of

486

: 00:31:23

in, in a space that's so competitive?

487

: 00:31:27

So three things, right?

488

: 00:31:28

I would say the first, the

biggest difference maker is the

489

: 00:31:31

unified data and context, right?

490

: 00:31:34

Without that, AI is going to

be way too generic, right?

491

: 00:31:39

So I think getting in that layer is

going to be the biggest difference maker.

492

: 00:31:45

Couple of other areas I would

say, uh, productivity economics is

493

: 00:31:49

something that I would say is the

biggest, um, uh, strategic advantage.

494

: 00:31:55

Productivity economics, it's, you

have to have a relentless focus.

495

: 00:31:59

Uh, how much time is spent on productive

work is a question you gotta ask,

496

: 00:32:03

versus what can you do to, you know,

move away from the non-productive work.

497

: 00:32:07

And the third thing I would

say is end-to-end automation.

498

: 00:32:12

Rather than introducing a specific AI

tool that doesn't integrate well into

499

: 00:32:17

the, you know, the entire ecosystem,

the end-to-end automation is going

500

: 00:32:23

to be a big, uh, strategic advantage.

501

: 00:32:26

Firms that do these three really

well are going to reap the

502

: 00:32:29

benefits very quickly, right?

503

: 00:32:32

So those are, I would say, three things

that firms can use to ga- gain a strategic

504

: 00:32:38

advantage- Mm-hmm … in the near future.

505

: 00:32:41

Mohan, that's a great way of wrapping

up this conversation, bringing it

506

: 00:32:45

all together, and kind of goes back

to the beginning, you know, starting

507

: 00:32:48

with data, how important data is,

and that's, you know, where you

508

: 00:32:53

can add most value Right there.

509

: 00:32:57

Mohan, thank you so much

for coming on the show.

510

: 00:32:59

Such a great conversation.

511

: 00:33:01

I was- been looking forward to

this conversation sometime since

512

: 00:33:04

our previous one a year ago.

513

: 00:33:07

Um, thank you so much for

sharing such great insight.

514

: 00:33:11

It was an honor to have you on.

515

: 00:33:13

Where can our audience get more

information about Steward Partners?

516

: 00:33:17

So obviously, you, you can go to

our, uh, website stewardpartners.com.

517

: 00:33:22

We also have our LinkedIn channel.

518

: 00:33:26

We have our, uh, channels on, um, on,

uh, you know, Facebook, I would say.

519

: 00:33:32

But, uh, we are also very active

in the, in the press space.

520

: 00:33:36

We are participating in a lot of

industry conferences, but if you

521

: 00:33:39

want to learn a lot about, uh, our

practice, our advisors, go to our, our,

522

: 00:33:44

uh, website www.stewardpartners.com

523

: 00:33:49

and, you know, we'd love to have

a conversation with you guys.

524

: 00:33:53

I would like to stop and, you know,

give, like, my final pitch about,

525

: 00:33:58

like, um, AI along with advisors.

526

: 00:34:02

Advisors are not going to win by, you

know, uh, competing with AI, right?

527

: 00:34:10

Co-opt, like, I would say, uh,

focus on your strengths as advisors.

528

: 00:34:18

Uh, that's the best way to win in a

AI first world in wealth management.

529

: 00:34:25

Yeah, you're exactly correct, Mohan.

530

: 00:34:28

Just-- And it goes back to

where do you get started?

531

: 00:34:31

Focus on the things that take the most

time, that maybe you struggle with.

532

: 00:34:35

Have AI help you there, but it's a

complement, and it can help your practice

533

: 00:34:40

immensely having that complement to

what your strengths are, um, out there.

534

: 00:34:46

So great advice, Mohan.

535

: 00:34:48

Way to wrap it up.

536

: 00:34:50

And thank you so much for listening

to this episode of Zephyr's

537

: 00:34:54

Adjusted for Risk podcast.

538

: 00:34:56

You can watch all of our other

episodes on the Zephyr YouTube

539

: 00:34:59

channel, Spotify, and wherever else

you watch your, uh, favorite podcasts.

540

: 00:35:04

Be-- please be sure to like and

subscribe to those channels and

541

: 00:35:07

give us a follow on LinkedIn.

542

: 00:35:08

Thank you very much, and have

a great rest of your week.

543

: 00:35:12

Thank you, Ryan.