Sean 0:01

How should AI affect my financial advisor search or how I work with my advisor? These days AI infiltrates just about every aspect of the news, business, or otherwise. And so it's a natural question to ask how would AI affect my use of an advisor or our relationship or in my search to find an advisor. So it's still early days, and I am not an expert by any stretch. I've only played on the surface with a few tools, but I think I have a sense of what AI can do and can't do in the financial advice world from what I read and from some personal experience. And largely from 24 years of practicing as a financial advisor, about half of that time I spent recruiting other advisors, collaborating with other advisors, sharing clients, being in joint meetings, talking to lots of people about money, etc. So the first thing is AI is going to change things in just about every profession, every industry. And so I don't think financial advice is any different. Just like the internet gave us all access to information much faster, I think AI will is accelerating that trend. And at a minimum, one great way to use AI if you already have an advisor you work with and you have a good relationship and you enjoy uh working together is to spot check anything that you're not sure about. Or before you ask your advisor a question about your specific needs, uh drop it into AI just like you would a Google search, see what it has to say. If you don't understand the results, or if you want more follow-up, I think that's a great way to inform your questions for your friends or advisor. So don't be afraid to not that you're don't trust your advisor's answers or that you feel like you need to do your homework first, because if you're paying an advisor, they should be happy to answer your questions whether you've done any prep work or not. But I think using AI to get a head start on a conversation is a great, great way to use uh that technology. Um, as an advisor uh or as a as a consumer of other professional services, that's what I do. As my expertise is very narrow, it doesn't extend to many things that I need in life: home services, uh car maintenance, etc. I'm happy to have uh a more augmented approach to research than just a Google search. So AI is great. If I want to ask someone about my air conditioning and I'm woefully ignorant on that topic, using AI to refine what I'm asking, uh if nothing else, to sound like I know what I'm talking about more than I really do, uh, that's a great way to use it. So if you already have an advisor, you like the relationship, I think you know having AI be your first place to go to ask a question, especially if it's not overly complex or you don't think it's overly complex, it's a great place to start. Um if you're looking for a new advisor or your first advisor, I think in the long run, AI will become a phenomenal uh done-for-you service or or enable done-for-you services to find the right advisor. There's a few options out there, advisor finder is one, and there's a few other tools that um you can match, get matched with an advisor. Smart asset uh does a lot of content, and so therefore, they if you put in your email and phone number, they will someone will call you. Dave Ramsey has a platform to connect you with an advisor uh that follows his um methodology. So there's lots of ways, or at least a few ways, where you can uh find an advisor, be matched with an advisor right now, but I think AI tools will before too long, maybe two years, maybe five years, make that a much more accurate and um or cast a wider net. Because right now, for most of these search tools, the people that are coming up are people that have paid to be in directories or subscribed, they're paying on the other end to be a selected provider, for example. Dave Ramsey has a good example. Great platform, great philosophy for people who need it. Um and when you go to his uh endorse local provider, I believe is the name of the program, they're gonna get someone who's paying a subscription fee on the back end. Same thing with Smart Asset. Uh, I'm not sure about Advisor Finder, but there's there's different tools, but the advisor that's you would be matched with is also paying. So it's gonna be a fairly limited um pool of advisors they're fishing in because a lot of advisors get to a point in their career where they don't necessarily need to pay to be listed. They're getting referrals, they're growing organically, and so they don't need to pay for introductions. They get they get enough as it is to grow their business or maintain the business the way they want. Um, but I think you know, using AI to put in different parameters that you think you might want for an advisor and see what happens, that it's a that's a great um approach. I my understanding of the large language models, the LLMs that are the base of most AI, it's it's just pulling from what's out there on the internets. So if an advisor doesn't have much of a web presence, they could be the best fit for you, and you may not ever come across them using purely digital methods, no matter how robust they are. For example, I have a friend who has been doing this about two months longer than me. We've known each other since the very beginning. Um, he he moved over to the network I was a part owner, owner in about 10 years ago, and I never thought he'd leave our original firm. And he has never done any website to speak of, any marketing, nothing, because he's very good at what he does, he's very hardworking, very diligent, very organized, and he just built things basically through referral only and has never had a need to advertise market. On the other hand, I have a uh I know another advisor who's uh 25 years senior to older than the first advisor, who has tried all number of marketing things in the 10 years or so that I've known him, and none of them have worked, but he might pop up in various searches if you uh were doing those because he's trying to market. But in my opinion, the the the first advisor, the younger advisor, would be a better fit for most people because of his diligence and organization and honestly his relative youth and and therefore runway to be able to serve a client uh longer than someone in their mid to late 70s. That's just one example, very anecdotal, but I believe that is not rare, where the people uh probably like a lot of professional services, the people that are doing the most marketing, um you may not want to go to them. That may not be true in uh in personal injury law uh personal injury attorneys, where you just need to get attention and therefore marketing a lot matters. But other professions, once you've built to a certain point, it seems to me less uh outbound marketing that's not just content marketing is needed. So AI to do a search for you, I think is probably good right now, but would be great or or better in in the coming years, because the more that there's data out on the internet, the more that the AI tools can pull from to organize the search. If you don't know anything about if the internet does not have any data about a particular advisor, that advisor will not come up in any digital search, right? So I think the old-fashioned way of asking people you trust, uh, friends, family, coworkers, um doing research about a particular niche, if you have a certain set of needs to find advisors who serve that, it's gonna be more fruitful. Um, the one way that I think could be interesting if you're talking to a potential new advisor, that is gonna be very valuable because it it's not just about the current moment, it's about how a person, the advisor, sort of thinks about change in technology. I think adding to your list of questions of what you would ask a potential advisor, I think it's to be a very natural question to say, how are you using AI or how do you envision using AI in your practice? For a couple different reasons. The first and the most obvious is just to get a sense of you know what are they doing, what are they doing right now. That's probably the least valuable uh part of the of the answer from my perspective because of how much things will probably change. They already have in the last year or two and will continue to evolve at a fairly rapid pace. And that is what you're really looking for, I think, is how adaptable is this person? Um because you my perspective, and probably because this is how I I think about the topic. I think we as advisors need to be fairly um open to change and open to new tools to not be stagnant and make sure we are not stuck in our ways of doing something the way we've done for 20, 30, 40 years. But also there are certain principles of how how you work with a client, certain investing, financial planning principles that probably won't change much unless the laws change or regulations change. But how to get things done from a from a tool standpoint, I think staying static is probably not the best approach, especially if you're you know in your 50s or younger, where you have a long runway, hopefully, of planning for retirement, getting into retirement and living through retirement, making your money last as long as you do. If someone found uh a financial calculator that worked for them in 1987 and has never changed using the financial calculator, it might work, but I think that's pretty limited when there's uh a basic Excel spreadsheet would do the job, and then other financial planning tools potentially. And you know, if the AI can organize the information, do the calculations um more robustly and give a good presentation. Again, there's a lot of financial planning software that does that. I think it'd be silly for a divisor to never update from you know pen and paper or a 2B uh financial calculator to current tools. Uh and again, this is going to depend on the clientele they work with, or they work with people in their 80s and 90s right now. Maybe there's no reason to adapt to current methods. Um, but I think if you depending on your what you do personally from a technology and change standpoint, in a perfect world, I think you would your advisor would kind of mirror that. So if you're a cutting-edge, bleeding edge, early adopter, I think having someone that leans that way is probably a benefit. And then they can they can make the professional decisions that make those judgments on hey, how do we protect your info as a client? I have to make sure these tools protect that information because obviously that is a key component of any AI that we would use as advisors. We have to be very, very aware and trust that the systems we are giving client any info to are locked down. And again, that's usually uh decided at the levels, higher levels uh from a custodian standpoint. So a Charles Schwab Fidelity, uh LPL Financial, who I happen to use, uh Altras is an up-and-com up-and-coming, very popular custodian where the money is held. The people at those companies will make the decisions on what uh what cybersecurity, etc., and privacy has to be in place because we can't feed in your account info without having extreme confidence that that's going to remain secure and private, right? So um I think in a perfect world, you want your advisor to match your excitement or uh adaptability for new technology, AI included, and then you want them to add the layer, which you may be thinking of depending on your background. How private does is my information? Uh, because when in doubt, you know, I think as a as a someone as a safeguard, as a as a um steward of other people's money and information, we have to be extra cautious when it when we're not sure if the tools will protect the information. So um I believe AI will do a lot more of what the internet uh has done so far, which is make kind of enable financial advisors to be more efficient, um answer questions faster, be smarter, etc. So the information is freely available, but interpreting it, make figuring out how it applies to your situation. I'm I don't think AI is to the point where it can't replace very many advisor functions, except maybe the most basic. You know, if doing retirement planning calculations, if it knows what variables to ask you, if you don't give it all the variables, it should be able to give us a um, you know, most retirement planning calculations at their core are not super complicated. If you're talking about how much money, how much income do I need, therefore, how much money do I need, how many years do I have, uh, how much money do I have now, how much am I contributing, what's my rate of return, what's the uh what's the inflation rate? If you get those those variables, what's my life expectancy and my spouses if applicable? If you have all those variables, the A the AI, whatever tool should be able to to give you a what we call Monte Carlo analysis pretty quickly, um, or or you know, how much what's the probability of success given historical market information and all that data that we just uh that I just ticked off? Social security, pension info, etc. So um, but then interpreting that information and of course, like anything else, figuring out what to put in the model, you know, what are the um you know, what are the assumptions we're making, like any problem solving, even even a relatively simple calculation like retirement planning. I say simple as as a practitioner, maybe it's not simple uh for most people doing it themselves or who have never thought about all these variables, uh, because that's my experience is people are not sure how to calculate anything, and that's why we come in. But um, you know, 10 years from and maybe maybe everyone will be able to do their own personal retirement calculation and feel comfortable, just like they do um using a calculate basic calculator on their smartphone. But for now, uh the tools I think could do that, but but interpreting what to put into the model, uh what assumptions to make, how confident to be in the results. Uh, and then I think there's so many more variables in these life decisions when it comes to retirement planning, for example, that um I believe when the internet uh you know 10-15 years ago, probably 15 years ago, at least now, maybe 20, when internet uh money managers were coming available, they were called robo advisors, and one of the one of the uh preeminent sort of thought leaders in our space said uh he envisioned we would become more uh robo advisors wouldn't take over, it would be more that it allowed you know human advisors to become bionic, and that's a pretty nice um metaphor, right? So we can use these tools to enable our humanity to be more efficient, effective, better calculators, etc. So I I my guess is AI would do the same thing. And in my work, and I think in most advisors' work, or a lot of them at least, the way we understand a client is not is very much beyond the numbers. It's you know, how does each spouse relate to each other? What will cause them worry? How will they get things done? Um, I've said many times in my 24 years of as a professional advisor and 25 and a half years of marriage that being in and being married has helped me be a better advisor, and being an advisor has helped me hopefully be a better husband because you're asking questions, follow-up questions. What do you mean by that? How does that make you feel? Tell me more about that. Um we we learn how each other communicates, and that's you know, the the the the AI tools are certainly getting better and better at that, and it's probably be to a point where they understand if we say something sounds fine, that may or may not mean it's really fine. Or if something sounds good, well, is good, is that good, or is good just kind of average. Um, so that's the kind of thing that I think the professional advisor with experience, empathy, life experience, professional experience can make can make the AI tools do what they need to for a particular household or individual. So um that will evolve, and I think the the advisors who win and succeed the most will be um will be using these tools and getting better at them and figuring out how to deliver the information in a way that does not get in the way of the relationship. Uh and again, depending on the age and and situation for each of us, we may or may not like the idea that an advisor is using AI to do the homework. So it could a lot of what we do might be as an advisor, okay, I'm gonna do all this work in the background and I'm gonna summarize it in the most human way possible. And the advice in the and you on the other end might not ever know how much research I did or what tools I used, because that's not relevant to solving the problem. Um, for some of us now, I know people that if you say, hey, I did I use AI to figure out your retirement planning and your financial plan, it might make them nervous. And even if it's a great plan, well thought out, fits perfectly, just invoking AI can be sort of unnerving for some people. So knowing having a sense of how to determine who who's excited about that AI is is doing the heavy lifting in the background, technically, and who's not, that is sort of for now, that's what makes humans human, right? We can determine the same information delivered the same way to two different people can provide wildly different responses. So um for now I think the way that AI will affect um replacing financial advisors or or you know how you use it in your search for a new advisor is just like any other tool. You use it, but don't count on it to be your sole decision maker, do not blindly follow it because uh at some point on the internet on the on Google search, you end up you ended up just getting whoever was paying to be at the top of the list, right? And the same thing may happen in AI. So there's varying degrees of um implementation and pervasiveness right now, but I think you still want to be using your human judgment. Do you know, like, trust this person? Do they have references you can talk to? All the basics that you might use before the internet, before AI, to feel like you're getting someone you can work with. And when in doubt, I think trust your gut because even if someone's a great fit, technically, if you don't, if you don't really like talking to them, or you don't um not that you have to get excited to talk to your financial advisor, but if you're not you don't feel like you'll get what you need when you call or reach out, I I think that's that's a sign we should still listen to. Um, because this isn't, you know, this isn't um medicine where that we, you know, a doctor maybe fixes something and leaves, and if they're the best heart surgeon, it doesn't really matter if if they're better or it matters, but it maybe you can overlook a bad bedside manner. Personal finance is personal. Um, and again, I'm sure every heart surgery is a little different. But if if uh if I get someone that's done 10,000 heart surgeries and I know they're still on the top of their game, I may not need to have a real deep conversation with them. I just want to make sure it gets done. Whereas in financial advice, the technical stuff is very important, but you also ideally want someone who uh you can go to when you have bad news, good news, um, and can help you get where you're trying to go and make you feel at peace with your money. So for now, I think AI is a useful tool, but I wouldn't let it drive your search for an advisor too much. But but at least look for an advisor that sort of matches your approach to to the technology and then adaptability for change. Because if you're if you're if you want pen and paper and you want to call people, call your advisor all the time, talk on the phone all the time. You don't want someone who's using the the coolest AI technology to schedule appointments or do holographic visits when that's a thing, or if it's a thing. So hope that makes sense and give me a shout if I can be of use. Take care.