Podcast 275 - WILL AI MAKE INVESTMENT ADVISORS OBSOLETE WITHIN 10 YEARS?

Welcome to Safe Dividend Investing’s Podcast # 275 on May 16th of 2026. 

My name is Ian Duncan MacDonald, and I am the author of 7 investment books. My seventh investment book, Achieving Financial Independence Safely - 200 NYSE Stocks Analyzed and Scored" became available January 3rd on Amazon. You can easily find it by searching in Amazon or Google for "Ian Duncan MacDonald books". For more information on all my books, stock scoring software and podcasts go to www.informus.ca

To build a strong, generous portfolio Start using the free AI system provided in this podcast to analyze and score your proposed stock purchases s in seconds. Visit the attached transcript where the free AI system is provided. When I saw this software in action, it made it seem very possible that investment advisors could be replaced by technology within ten years.

It is a minority of a financial institution’s employees that create distrust with their investor clients. Many investors with substantial savings would rather keep the money in a bank savings account, where it loses 3.5% of its value each year to inflation, than entrusting it to a financial advisor.

For investment advisor to stay relevant it would have to start with better screening of the investment advisors. A client wonders who is this stranger that says they are an investment advisor and want to help me? Can I trust them? In this podcast I suggest several ways that investors could possible again learn to trust advisors and the institutions they work for. Is it possible for the industry to change?

IAN 

Ian Duncan MacDonald
Author and Commercial Risk Consultant,
President of  Informus Inc
                              2 Vista Humber Drive
                               Toronto, Ontario
                                Canada, M9P 3R7
                                 Toronto Telephone - 416-245-4994
                                   imacd@informus.ca

Transcript

Podcast 275

Safe Dividend Investing

Greetings to investors all around the world. Welcome to Safe Dividend Investing’s Podcast #275, recorded on May 16th of 2026. My name is Ian Duncan MacDonald. I am the author of seven investment books. 

I HAVE AN IMPORTANT IMPROVEMENT ANNOUNCEMENT : START USING THE FREE AI SYSTEM PROVIDED IN THE ATTACHED TRANSCRIPT FOR THIS PODCAST TO ANALYZE AND SCORE STOCKS IN SECONDS. 'WHEN I SAW WHAT THIS SYSTEM COULD DO NOW, IT MADE ME REALIZE THAT INVESTMENT ADVISORS COULD BE MADE IRRELEVANT WITHIN TEN YEARS, 

My latest book delivered in January was “Achieving Financial Independence Safely – 200 NYSE Exchange Stocks Analyzed and Scored”. For those trading in Canadian stocks the prior book was Canadian High Dividend Investing – 215 Scored Stocks.

To learn more about how you can benefit from my investment books, visit either my website www.informus.ca or visit amazon.com’s website and do a search for "Ian Duncan MacDonald books”. At Amazon you can find sample chapters and reviews by investors who have benefited from my books. 

Recently, I read a report summarizing the key discussions at an important Securities Commission meeting. As expected, all the major billion-dollar investment institutions were there to promote their interests. I saw no evidence of input from self-directed investors.

I wrote to the securities commission and asked why self-directed investors did not seem to have had a voice in their conference. They replied that a self-directed investor had been part of one panel. 

I then asked who it was? What had he contributed? Why was there no mention of his presence in their report? I have yet to hear back from them and I wonder if I ever will.  

The number of self-directed investors is rapidly rising. It cannot be ignored. One Securities Commission reported in 2024 that only 61% of investors now work with a financial advisor, this is an 8-point drop compared to their research in 2020. Two years have passed, could those using investment advisors now have dropped below 50%? Are investment advisors going to disappear the same way travel agents disappeared. 

Travelers proved to be quite capable, thanks to the internet and credit cards, in handling their own travel arrangements. It was faster, more convenient and removed an expense element for hotels and airlines who could then offer lower prices.

There is something illogical about entrusting your life savings to an investment advisor. Who is this advisor working for? Don’t fool yourself into thinking he is working for you. He is an employee of a financial institution. If he or she frequently misses the monthly objectives set by their employer, they will be out of a job. 

Could it possibly be that investment advisor recommendations for your portfolio are not objective? If they must choose between selling their employer’s mutual fund or a third party’s mutual fund, which one do you think you are going to be presented with? 

 If the financial institution they work for is underwriting a new stock’s Initial Placement Order, do you think the investment advisor will be pushing their employer’s IPO?

When you are establishing a working arrangement with an investment advisor to handle your investment needs you are into a negotiation, whether you realize it or not. The advisor needs you to agree on what percentage of your portfolio they can take to manage it. If you were an advisor, and your income depended on whether you could sell the client on giving you 1% or 2.5% of their portfolio’s value for their services, which percentage do think they would push first? While 1% or 2.5% does not seem like much, if it were a million-dollar portfolio, the charge would be $10,000 or $25,000. In addition, there will be all those small nickel and dime charges also deducted from your portfolio. 

 Billing you monthly would draw too much attention to what they were taking. Many investors are not even aware of what their investment advisor is costing them.

Over a year an investment advisor will most likely spend less than five hours earning their fee from you. They are busy. It takes time to Prospect for new clients to replace the 20% to 40% of clients they lose each year.

Unfortunately, it is the financial institution’s employees that create distrust with investors. Many with substantial savings would rather keep the money in a bank savings account, where it loses 3.5% of its value each year to inflation, than entrusting it to a financial advisor.

Since investment companies seem to be unable to control the fraud and dishonesty created by a minority of their employees then the only solution in establishing a trustworthy relationship with their customers may be to ask the government to police the relationship. 

It must start with better screening of the investment advisors. A client wonders who is this stranger that says they are an investment advisor and want to help me? Can I trust them?

Why can’t all investment advisors be licensed with one government department to which any client or prospective client can have easy internet access to a constantly updated  advisor database to get answers to questions like the following.

(1)   What is the advisor’s home address to help confirm identity and stability.

(2)   How many years have they been licensed.

(3)   What is their educational background and what dates did they graduate.

(4)   What investment education have they completed on what dates?

(5)   What is their employment history and job titles with each employer plus starting and ending dates.

(6)   How many clients are they now servicing for what average size of portfolio?

(7)   How much do they have personally invested in stocks, bonds, mutual funds, ETFs, real estate and other identified investments. How successful has their investing been?

(8)   What would be the value of the real estate they own and how large is their mortgage?

(9)   What is the value of all the unsecured loans they have, including credit cards.

(10) Describe what current and historical litigation they are involved in as a defendant or as a plaintiff. Report the amounts involved in the court cases? 

(11) Have they ever been placed for collection with a collection agency. Describe the circumstances, the amounts involved and how it was resolved. If they cannot handle their own money, do you want give them access to your money?

(12) Describe all complaints that have been registered against them with the securities commission and how they were or were not resolved. 

(13) Have they ever been criminally charged? What were the circumstances and what was the penalty if convicted.

If this data was easily accessible it would lessen the fear of delegating the handing of your retirement savings which could be in the millions.  Investors could find and compare the best advisor to handle their investments. 

Is it unusual for an Investors to want to work with someone who has a squeaky-clean background and years of successful proven investing experience?

While this would solve one credibility concern. However, I would also suggest that the financial institution’s management systems could also be improved, as follows:

(1)   Instead of just deducting charges from a client’s portfolio, the investment company should bill the client monthly for every charge. The charge would then have to be clearly identified. A client then either pays or disputes the charge. If payment problems arose the investment company would have to pursue their receivable the same as any other business. If the billing dispute ever went to go to court and a judgment were rendered in the investment company’s favor, then they might choose to execute that judgment against the assets in the client’s investment account. Otherwise, they don’t touch it.

(2)   When a monthly statement is rendered, it should show very clearly what amounts entered and left the investment account. This would include such fees as mutual fund management fees. The amount originally invested in each stock and the date it was invested should always be shown with its current value, to let the client better judge the success of the investment.

(3)   A record of all the dates that the client was contacted by phone or met with their advisor should be provided monthly. Access to that contact data would be a constant reminder of the care the client was receiving. A contact quota policy established by the financial institution would set to confirm their concern about the client relationship.

(4)   All purchases and sales of investments would be recorded, with the date and time the client gave permission for the advisor to take the action. A brief comment on why the action was taken would remove concerns that the advisor was just churning the account.

(5)   If a client ever objects to an action by the company or investment advisor, the date the objection was registered with the institution would be recorded and its status would be updated weekly with client until resolved 

(6)    With artificial intelligence much of this recording and data requirements for these changes could be handled easily and quickly. The investment industry would initially see these controls as onerous, but when they started to win back clients who had left; and converted self-directed clients to full clients, they would see the benefit. Their retention numbers and revenues would increase. The constant bickering between employees, management and clients would shrink.

All People, including investors, tend to be naturally lazy. I believe that any investor could be convinced of the benefit of having a trusted, knowledgeable advisor give them advice in how they could  best manage their wealth. However, this aid would be contingent on the charge being reasonable and the benefits being real, open and honest.

 Advisors need to be encouraged to establish trusted, warm, human interactions with their clients otherwise Other wise Artificial Intelligence systems will soon replace investment advisors.

That’s all for this week folks except for the correspondence recorded in this podcast’s attached transcript between myself and one of our loyal listeners in Australia and my response. It is all about using AI in your investing . To me it is astoundiw5it can help build strong,  safe. generous stock portfolios

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Perter wrote:

“Hello Ian, I hope you are well. I Love your work, so I converted it into an AI model.

I invite you to paste the following text (below the blue line) into Gemini (or probably any other AI 

Then follow the AI prompts to expand your research to infinite possibilities. All for FREE!!!!!

Love your work!

Regards
 Peter 

_____________________________________________

 SCRIPT TO BE COPIED AND ENTERED INTO THE AI SOFTWARE PROGRAM:

Tabulate the following data results where possible for company 

Calculate

1 the Current Stock Score based on the following:

0 to 99 cents = 1

1 to 1.99 = 2

2 to 4.99 = 3

5 to 9.99 = 4

10 to 14.99 = 5

15 to 19.99 = 6

20 to 29.99 = 7

30 to 49.99 = 8

50 to 99.99 = 9

>100 = 10

Calculate

2 the Historical Stock Score based on the following:

0 to 99 cents = 1

1 to 1.99 = 2

2 to 4.99 = 3

5 to 9.99 = 4

10 to 14.99 = 5

15 to 19.99 = 6

20 to 29.99 = 7

30 to 49.99 = 8

50 to 99.99 = 9

>100 = 10

Calculate

3 the Price Trend Score based on the following:

If the stock has been sold for less than 4 years = 0

If the Current Price is less than the price 4 years ago by more than 50.55% = 1

If the Current Price is less than the price 4 years ago by 11.50% to 50.49% = 2

If the Current Price is less than the price 4 years ago by 0.50% to 10.49% = 5

If the Current Price is within 0.51% to 1.49% of the price it was 4 years ago = 6

If the Current Price is 1.50% to 10.49% more than the price it was 4 years ago = 7

If the Current Price is 10.50% to 99.4% more than the price it was 4 years ago = 9

If the Current Price is more than 99.4% of the price it was 4 years ago = 10

Calculate

4 the Book Value Score based on the following:

0 to 99 cents = 1

1 to 1.99 = 2

2 to 4.99 = 3

5 to 9.99 = 4

10 to 14.99 = 5

15 to 19.99 = 6

20 to 29.99 = 7

30 to 49.99 = 8

50 to 99.99 = 9

>100 = 10

Calculate

5 the Book Value to Price Score based on the following:

Current price is less than the Book Value by more than 49.49% = 10

Current price is less than the Book Value by 10.5% to 49.50% = 8

Current price is less than the Book Value by 0.5% to 10.49% = 6

Current price is between 0.51% to 1.49% of the Book Value = 4

Current price is between 1.5% to 9.49% greater than the Book Value = 2

Current price is between 9.5% to 49.49% greater than the Book Value = 1

Current price is 49.5% or greater than the Book Value = 0

Calculate

6 the Analyst Buy Ratings

If 0 analysts give a buy rating = 0

If 1 analysts give a buy rating = 2

If 2 to 3 analysts give a buy rating = 3

If 4 to 5 analysts give a buy rating = 4

If 5 or more analysts give a buy rating = 5

Calculate

7 the Analyst Strong Buy Ratings

If 0 analysts give a strong buy rating = 0

If 1 analysts give a strong buy rating = 3

If 2 to 4 analysts give a strong buy rating = 4

If 5 or more analysts give a strong buy rating = 5

Calculate

8 the Dividend Yield Rating

If no dividend paid = 0

If divided yield is between 0.001% to 1.49% = 1

If divided yield is between 1.5% to 2.49% = 4

If divided yield is between 2.5% to 4.49% = 6

If divided yield is between 4.5% to 7.49% = 8

If divided yield is between 7.5% to 10.49% = 10

If divided yield is greater than 10% = 2

Calculate

9 the Operating Margin Rating

If Operating Margin is less than 1.49% = 0

If Operating Margin is between 1.5% and than 4.49% = 1

If Operating Margin is between 4.5% and than 9.49% = 2

If Operating Margin is between 9.5% and than 14.49% = 3

If Operating Margin is between 14.5% and than 19.49% = 4

If Operating Margin is between 19.5% and than 29.49% = 5

If Operating Margin is between 29.5% and than 49.49% = 6

If Operating Margin is between 49.5% and than 69.49% = 8

If Operating Margin is between 69.5% and than 79.49% = 9

If Operating Margin is over 79.5% = 10

Calculate

10 the Trading Volume Rating

If fewer than 10,000 shares traded daily = 0

If between 10,001 to 30,000 shares traded daily = 2

If between 30,001 to 50,000 shares traded daily = 3

If between 50,001 to 100,000 shares traded daily = 4

If between 100,001 to 250,000 shares traded daily = 5

If between 250,001 to 500,000 shares traded daily = 6

If between 500,001 to 750,000 shares traded daily = 8

If between 750,001 to 1,000,000 shares traded daily = 9

If over 1,000,000 shares traded daily = 10

Calculate

11 the Price-to-Earnings Rating

If forward PE is 0 or less = 0

If forward PE is between 01 to 5.49 = 10

If forward PE is between 5.5 to 15.49 = 9

If forward PE is between 15.5 to 20.49 = 8

If forward PE is between 20.5 to 25.49 = 7

If forward PE is between 25.5 to 30.49 = 6

If forward PE is between 30.5 to 35.49 = 5

If forward PE is between 35.5 to 40.49 = 4

If forward PE is between 40.5 to 99.99 = 2

If forward PE is greater than 100 = 1

Add the Current Stock Score plus the Historical Stock Score plus the Price Trend Score plus the Book Value Score plus the Book Value to Price Score plus the Analyst Buy Ratings plus Analyst Strong Buy Ratings plus Dividend Yield Rating plus Operating Margin Rating plus Trading Volume Rating plus Price-to-Earnings Rating

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Hi Peter:

Thanks for sharing your AI scoring approach. I had been thinking about writing such an AI script for the stock scoring to see if it would work as you have show it does.

I tested what you send using the stock BMO (Bank of Montreal) traded on the NYSE and the TSX. I compared the results to BMO in my book Canadian High Dividend Investing. I also went into my source of stock data, the TD Bank stock research pages. 

I first tried the script on Microsoft's AI Co Pilot and it did not calculate. I had not previously used Gemini so I got into it and tried it. The score came out instantly at  70. I was surprised how fast Gemini was. It sure beats having to look up and enter the scoring data for 11 items into the IDM scoring software. I suspect you should also be able to enter a dozen stock symbols at once and have all the data and scores on the dozen in seconds.

What was missing in the 11 items scored by Gemini for BMO was Analyst Buys and Strong Buys Recommendations. This would probably have to do with whoever Gemini is using as their data source. That would be something for me to investigate. However, to manually add the one number score for “buys” to the BMO total score took seconds.

Many data sources they do spell out the recorded "buys" and "strong buys" for a stock. Different AI system probably pick them up. I will look further into it. 

Interestingly, the TD online search showed 4 buy recommendations which would have increased the total BMO score to 74. In my book written in 2023 the BMO  score was 76.

IAN