How Will AI Actually Change the Advisor's Job?

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Eden, as you think about AI and your role here, just what what comes to mind when you hear that future of AI?
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What does that look like?
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Yeah, I think what's becoming more prevalent, especially as AI tools become more robust and we're starting to see them in a lot more areas of what we do in financial planning.
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I think the number one concern that is popping up for people is will AI be able to take my job one day?
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Will AI be so robust down the line that my value as a financial advisor will not really exist anymore?
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That is a scary feeling.
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My livelihood and my career potentially at risk of being disrupted.
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Tell me more about that.
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Is that something you are feeling?
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Do you talk to others who feel similarly?
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What's the general sentiment from your perspective around that topic?
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Yeah, I think when AI was really early on, you know, those initial iterations of Chat GPT, it felt kind of rudimentary at first.
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Like, how could we possibly apply this to what we do every day?
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And over the past few years, it has just really expanded its capabilities where it can be applicable, especially in our industry.
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I feel like a few years ago, this was not really a concern for people when AI was new on the scene.
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We weren't really using it that much in a work capacity.
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And it's really starting to creep its way into this work capacity.
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And it's happening really quickly.
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I think it's a combination of how robust it's becoming.
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We're starting to really see firsthand what it's able to do.
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And it's also happening really fast.
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So for me as a younger advisor, I think it is a little bit of a concern being early in my career and watching how quickly AI has taken over certain functions of what we do, just in my short four-year career in financial services.
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And I do hear that from other advisors as well.
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Just, oh, you know, you catch a little error in an AI tool here and there, and it's like, oh, okay, good.
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I'm still needed.
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I'm still needed here.
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So I think I do feel it as far as looking at longevity, if it already has become this robust this quickly, where are we going to be in five, 10 years with AI?
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Yeah.
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Yes, I have a lot of thoughts about this.
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And I'm going to start by saying, I don't think anybody really knows.
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And so just full disclosure on this episode, we're not able to predict the future with regard to this.
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Is such a powerful technology advancing so rapidly that it would be foolish to say, yeah, we've got all the answers.
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Here's the three steps to do to future-proof your career and be good.
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But I think it's a very interesting topic that's top of mind for a lot of people in any industry, but we're of course going to specifically focus on the planning industry, the advice industry.
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Um, I'm as you think about that.
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AI has very rapidly advanced.
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And AI has been around for a AI started in the 1950s.
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So it's been around forever, but it became very accessible just a few short years ago.
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And when it became accessible just in the chat interface from four years ago to now, it is night and day, the difference in terms of the output there.
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So I as you think about that, Eden, what do you think is future-proof in terms of your role as an advisor?
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What can't AI do?
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Yeah, it's a great question and something that I have thought about a lot and also asked some other associates here just for their thoughts on that as we've, you know, adopted more of these tools.
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I think a huge element of our value add and the importance of what we do for our clients is the relationship element, this human element that AI can't bring to the table.
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Your robo advisor isn't gonna ask how you feel about certain things and be able to read your emotional responses and really feed into that.
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I think that's a massive area of value that I struggle to envision AI being able to take over that element of what we do.
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And it's really the core of what we do.
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It's so important for us to be able to have a real relationship with our clients and know them on that human level and be able to interpret emotions, the psychology of things, and understand human behavior as it relates to financial planning and financial decisions.
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Um, so I feel like that's a huge area where I would be hard pressed to imagine even 10 years from now, AI being able to fully handle that on its own, just with no human interaction.
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I think that's a big piece that is kind of proofing our job from AI just taking over financial advising.
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Yeah.
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Let's talk about that because I there are two things that I think advisors say that I would actually push back on in terms of AI can't do this.
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One is I think that you are half right with this.
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And I'll say this from the standpoint that I mean have you seen the stories about people that literally fall in love with their AI?
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Yes.
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And that was something that I actually just thought of as I was saying relationship.
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I was like, well, people have actually experienced a relationship with AI before.
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So I wonder how that could translate to other areas.
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Yeah.
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So so it did, I I would say that it can absolutely simulate empathy and simulate that connection because people have done insane things because of their relationship with their AI.
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AI can say way more empathetic things to my wife when she's going through a hard time than I can.
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AI always knows what to do, to to affirm and to um support whatever you're saying, to justify what you're saying, to allay whatever fears you have.
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Like it is already way better than I am, way better than any human can be.
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But it's it's only halfway that.
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It's all it's it's simulating empathy.
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What I don't think it can have, to your point, I think is that element of trust.
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Because for there to be trust in a relationship, there has to be something at stake.
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Like if you trust me, Eden, and I give you feedback on something, there's something at stake there.
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If James leads me astray, like that, there's there's stakes.
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AI can't have that.
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AI, I mean, there's stakes, like not from its perspective, it's just you know, translating your words into zeros and ones and running that through the filter and coming back with a response that it it's it's a different element of what that can look like.
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So I think that is something to be aware of.
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I I as advisors, what we need to do is be cautious, like not rest upon, oh, AI could never do this.
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There are things that I do believe AI cannot do, but it's what let's identify what those things are.
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So just to summarize, a couple things that I think sometimes advisors use to reassure themselves that I'm safe because of this, I think are false realities.
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One is that, oh, AI can't build a relationship.
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AI can build a relationship, which is eerie and weird, but the reality is it happens.
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Not maybe a full trusting relationship, not a human relationship, but it can simulate that.
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The second, and I don't think yeah, I forget if you said this or in our pre-conversation or in your outline is um sometimes we find an error in the output of an AI generated response.
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We say, Oh, I've still got a job, I'm still safe because there's that.
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Those errors will go away.
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There is no doubt that those errors become less and less frequent.
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So I think that those are the if I'm an advisor, those are the things I'm not resting my future on, of those things not being the case.
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Before talking about what I do think we should think about, there was a story, um, and in it was not even a story.
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This happened in 2016.
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Jeffrey Hinton was he's known as the godfather of AI.
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I don't know much about him, but I just read the story.
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Godfather of AI.
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He said, we need to stop training radiologists because within five years, AI will read scans better than humans.
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So this was 10 years ago.
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And to a degree, he was right.
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AI absolutely can read scans in a lot of cases better than humans.
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But since that time, the number of radiologists has actually gone up, not down.
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And Jensen Huang, the CEO of NVIDIA, kind of addressed this actually this year at Davos in a big speech.
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He's like, he he put it as this he said, um, AI is it's think about a task and think about the purpose.
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AI can replace the task, it cannot replace the purpose.
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So for a radiologist, what was the task?
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The task was the scan.
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The purpose was using that scan to diagnose disease, to care for the patient, to have that relationship with them.
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And so what he was absolutely right about, this being Jeffrey Hinton, was AI is doing a better job of the task.
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But it's not replacing the purpose.
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And so I think that we need to relate that to advisors.
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What is the task?
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Well, the task is running the numbers.
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The task is putting the numbers into our financial planning software, the task is generating the reports for the tax analysis.
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There is no question that AI, if not already, and I would say that even today it's already better than humans at that, but it's not replacing the purpose.
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The purpose being telling, sending across from someone, telling them they're going to be okay.
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Sending across from somebody and helping them to live better lives, using their finances as a tool to get there.
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So I think that the hard part about a job sometimes is when I say I'm a financial advisor, that's not one single thing that you're doing.
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It's a series of dozens and even hundreds of different, you can call them workflows or different purposes to what you're doing.
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And of course, there are some of those things that AI will absolutely replace.
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But those are the tasks, the purpose of why we exist, which goes back to your point earlier of not just having the um uh appearance of a relationship, the appearance of a trusting thing like AI can do, but actually having a true relationship, having something at stake, which means trust can exist, um, being someone that's deeply committed to the client, those are the things that I think do not get replaced.
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But well, before I go further, any any questions on that?
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Any, as you hear that, anything that you see that you say, James, this is something I feel like can be replaced as I'm looking at my job as an advisor.
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Well, I just want to circle back to one thing that you said that I think was really well said is the way that AI can simulate.
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I think that's such a good word for how it operates in that relationship capacity.
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There's that lack of genuineness that comes from a real human being.
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AI can make you feel good.
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It can say the things that you want to hear, which is actually also, I think, a caution with AI and what's important about having a human advisor is we aren't always going to tell the client what they want to hear.
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And actually we shouldn't.
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And so I think those are two really important pieces about what you mentioned earlier: that simulated experience is still a real experience, but it's not the same as having that genuine connection with another human being.
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And that's certainly an area of value that we still have, but we have to acknowledge that AI is fully capable of simulating that same experience, most certainly.
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So I really like how you said that for sure.
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And then just as far as, you know, catching errors, I think that was another great point that yes, it's very important.
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That is a huge part of our job.
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It's something that we're going to continue to do.
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But we have to acknowledge that AI is a learning model.
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So when we catch that error and explain to it why it's an error, well, it just learns something new and is very unlikely to make that same mistake again.
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So those are really good takeaways from it's easy to say these things are kind of keeping our job safe, but are they in the context of AI?
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So I really like that.
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Yeah.
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Yeah.
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Uh well said, I like that.
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I think here's think about the industry this way.
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Um, I don't know how many advisors there are, hundreds of thousands of advisors.
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Do you see all advisors being created equal?
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Like is the standard between the top and the bottom are is it the same caliber of advisor?
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Certainly not.
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No.
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Such a broad range of what even an advisor is within that top and bottom range.
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What you know, there's so many different types of advisors, the types of advice that's being given.
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So I would say certainly not.
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Certainly not.
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So I want you to imagine this visual.
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Imagine a graph.
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You've got um, and by graph I just mean like a line straight up and down.
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At the top, you have this is a 10 out of 10 advisor.
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Whatever makes them a 10 out of 10, what whatever you think that is, but like that's the best you can be.
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And at the bottom, you have the one out of 10 advisors.
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Whatever makes them one out of 10, you fill that in yourself.
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That's that's fine.
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Um what I think AI does is if you say, I think there's 300,000 advisors in the US, I could begin that number way off, but imagine 300,000 dots along this axis here.
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Some are a five out of 10, some are a 7.2 out of 10, some are a 10 out of 10, some are a 2 out of 10, everywhere across that.
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Imagine those like those dots, every single advisor is plotted.
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What I see AI doing is raising the floor on what's the bare minimum it's going to take to be acceptable as an advisor, to have a job as an advisor.
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And if today that floor is a two out of 10, because if we're honest, you can get away with being a pretty lousy advisor and still make a decent living in this industry.
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Whatever that bar is currently today, I think AI elevates that.
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Is it to a four out of ten?
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Is it a five out of ten?
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Is it a six out of ten?
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I don't know.
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But what it does is it absolutely says anyone who is below this bar, you like you should be very worried for the future of your career.
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And I think that's good.
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I don't like if if you're worried about uh your career being in jeopardy, but you're not a great advisor, you're not doing much for your clients, I don't think there's the world is not worse off as a whole for you no longer being an advisor.
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In fact, I think the world's better off for that person no longer being an advisor.
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But AI will never be the ceiling.
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The human is always going to be the ceiling.
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If you think of the 10 out of 10 advisors, you know, you think of the best advisor you've ever met.
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Were they excellent?
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Were they the best because they had access to some really great tool or software or projection abilities?
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Yeah, no, definitely not.
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So that's not what makes great advisors great.
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So as the floor is rising, that's bad news for advisors that aren't that great and don't do a lot of work for their clients.
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But the ceiling is still going to be the human.
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The ceiling is still going to be that person that um develops amazing relationships, cares deeply about their clients, does have that technical mastery of the of their craft, of what they're doing, but also can connect and empathize and relate, that also can stay on top of project managing, all the different pieces going on in their clients' lives.
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That also, you know, it those are things that who knows?
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AI is developing so quickly.
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Maybe there is a day where all of a sudden the floor is a nine and a half out of 10 and only the very, very, very top make it.
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I just don't see that happening anytime soon.
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And who knows, maybe this gets clipped and one day we look back and say, James, that was a dumb prediction because things happen fast.
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But I mean, I think it's also why it's especially here at Root, like we do, we talk about the four pillars of advisory excellence.
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And two of those pillars, frankly, like AI can replace.
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One of them is just the technical knowledge, one of them is that investment rigor, the way you approach that.
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I don't think that means as advisors, we don't do that anymore.
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Because AI is only good as the information that it has to base its recommendations on.
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And I think part of the value of an advisor, I think you mentioned hey, someone comes to us with a fully filled-out financial plan, but like AI did it.
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But they're still coming for an advisor.
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Why is that?
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Well, if we don't have the capabilities to understand the why of that output, like why is the output shown that way?
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It has to do with what we deeply understand all the baseline information and baseline assumptions.
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So there still absolutely needs to be that technical knowledge, the investment knowledge, the hard skills, but the more the focus can be on the financial psychology, the relationship, the being an excellent person, an individual, that I think is going to be the difference for the advisors that make it and the advisors that don't.
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Any any thoughts on that or questions or pushback?
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I think this is a really healthy reframe because even from the onset of this conversation, this can be a really scary conversation.
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It it can feel like you want to hide under a desk and never even think about working in this industry again.
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This can feel really scary from the advisory side.
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And I think that's just a really healthy reframe to think about where you stand as far as quality of advisor and what makes you a high-quality advisor.
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If the only thing that makes you a high quality advisor is the AI tool that you're using, to your point, maybe you shouldn't even be an advisor.
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So I think it's a very healthy way to reframe if you're sitting here feeling like some anxiety, some nerves, I don't know what's going to happen with my career because of AI and its position in this industry.
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It's a healthy way to think about where you stand in this industry.
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Do you feel that you're providing quality and value to your clients beyond just the bare minimum things that AI can absolutely do and often do better than a human being?
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And I think that is where we can really think about our value being far beyond just data outputs, data entry.
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It is much deeper than that, especially for a high quality, high-caliber advisor.
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So I think that's just a very healthy reframe in this world we live in because it can feel very dark and scary if you just go down the rabbit hole.
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It absolutely can.
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And at the same, we we talked, you know, we had our Sequoia Summit a few weeks back when we talked about this.
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At the end of the day, no, investing, I'm gonna pivot real quick.
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Investing is risk, and there's no way around that.
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Like literally anything could happen.
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We know historically what has, what the range of outcomes has been, but that doesn't guarantee us that the future will be the exact same.
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And it's kind of the same here.
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We do have to acknowledge that the future's unknowable and we don't know exactly what things are going to look like.
00:19:30.079 --> 00:19:32.240
But I think that we have a general sense.
00:19:32.480 --> 00:19:40.720
Um, and I would actually go one step further of I think it's good to have a little bit of anxiety.
00:19:40.960 --> 00:19:53.440
I think it's good to have a little bit of this anxiety saying, I'm going to continue to get better and do better and be better for more the clients I serve and for myself, because that's how you future-proof yourself.
00:19:53.680 --> 00:19:57.039
Sometimes if it can get so overwhelming, I'm thinking, what's AI gonna do?
00:19:57.200 --> 00:19:59.440
And and I've gone down that path before.
00:20:00.160 --> 00:20:02.960
But then I say, okay, let's let me play it out this way.
00:20:03.440 --> 00:20:09.599
Let's say AI wipes out, use an extreme number, 60% of the jobs in our industry.
00:20:10.079 --> 00:20:11.839
Do I think I could be in the top 40%?
00:20:13.519 --> 00:20:14.160
Of course.
00:20:14.400 --> 00:20:17.599
Of course, like do I think I could be a little bit, of course I can do that.
00:20:17.680 --> 00:20:18.799
What if it wipes out 80%?
00:20:19.039 --> 00:20:36.319
Can I be in the so it's it's less of a, and maybe that's the best or not the best way of thinking about it, but it's more of if I see what the average is out there and the bottom half is going to be uh eliminated, and I'm not even gonna say it's going to happen, but just hypothetically, what can I do to keep myself in the top half?
00:20:36.559 --> 00:20:40.880
If the bottom 70% is going to be eliminated, what can I do to keep myself in the top third?
00:20:41.119 --> 00:20:59.519
And I think that this is an industry where once people quote unquote make it, they're serving a certain number of clients, they're making a certain income, it's very easy to get stagnant and to say, I'm good, I've made it, I'm comfortable, I can provide for my family, and you stop pushing yourself to be better.
00:20:59.680 --> 00:21:12.160
And so I think that more than any specific skill to develop, that not major anxiety of curling up in a ball and the world's gonna end, and I, you know, just want to close my eyes and tune all out, that's not healthy.
00:21:12.240 --> 00:21:17.039
But the healthy anxiety of saying I can always get better, I can always improve.
00:21:17.279 --> 00:21:24.319
Those are the people that, in my opinion, are have nothing to fear about what's coming from AI.
00:21:24.559 --> 00:21:30.960
I do actually think, you know, pivoting again is what is the how does this naturally play out?
00:21:31.200 --> 00:21:40.640
Well, if you look at an advisor, let's say that in any given year, you can it depends on the client, depends upon the advisor, but let's assume any given year, I'm just gonna use a round number.
00:21:40.799 --> 00:21:42.640
This might be high, it might be low for certain clients.
00:21:42.799 --> 00:21:45.440
An advisor is spending 10 hours per year with a client.
00:21:46.480 --> 00:21:52.160
Those 10 hours aren't all in front of the client, talking to the client, having the relationship with the client.
00:21:52.240 --> 00:21:59.359
Like how many of those hours are things that are data entry, prepping for a meeting, following up from a meeting.
00:22:00.240 --> 00:22:01.759
Typing in notes.
00:22:02.000 --> 00:22:14.880
Doing like if you actually break down where those 10 hours go, I don't think it's uh improbable that 30 to 40 percent or more of those hours, like those aren't actually adding value.
00:22:14.960 --> 00:22:16.319
The client doesn't even see that.
00:22:16.480 --> 00:22:22.720
Those are the things that you have to do just so that you can be in front of the client, having the relationship, having the conversation, giving the guidance.
00:22:22.960 --> 00:22:24.240
So what does that mean?
00:22:24.400 --> 00:22:29.519
I do think that it means that um a lot of advisors' time is freed up.
00:22:30.000 --> 00:22:32.400
Now, when that time is freed up, what do you do with that time?
00:22:32.559 --> 00:22:36.000
Do you say, okay, well, I'm gonna keep service where it is and just have more free time?
00:22:36.079 --> 00:22:36.720
You can do that.
00:22:36.880 --> 00:22:40.319
I'm gonna elevate the level of service that I provide to clients, you can do that.
00:22:40.480 --> 00:22:43.519
I'm gonna take the time that was freed up and serve more clients.
00:22:43.599 --> 00:22:44.480
You can also do that.
00:22:44.640 --> 00:22:49.359
So I think the natural progression for the industry is you know, it's it's it's a hard question.
00:22:49.519 --> 00:22:51.839
People say, how many clients can an advisor serve?
00:22:52.079 --> 00:22:55.119
Because like there's there's a wide range of that.
00:22:55.279 --> 00:22:58.720
It could be literally one if you're a family office.
00:22:58.960 --> 00:23:04.400
It could be hundreds of clients if you're working at a call center, one of these large brokerage firms.
00:23:04.640 --> 00:23:12.240
Um let's say that number's a hundred for a median advisor serving clients like we serve.
00:23:12.400 --> 00:23:13.519
Let's just say that number's hundred.
00:23:13.839 --> 00:23:25.759
Um, that number probably could go up without advisors feeling like the time that they're spending is going up, without feeling like, man, if I went from 100 to 150 today, I would feel super stretched then and burned out.
00:23:25.920 --> 00:23:29.039
No, well, can I do that without feeling that way?
00:23:29.200 --> 00:23:36.880
So I do think the natural progression is if it takes less time, it takes less cost to serve a client today.
00:23:37.039 --> 00:23:40.319
I do think that over time, cost of advisory services go down.
00:23:40.480 --> 00:23:45.200
I view that as a positive because that means clients have better outcomes.
00:23:45.359 --> 00:23:49.599
If the cost of services is lower, I mean that goes right to their bottom line.
00:23:49.839 --> 00:23:57.039
And if as that's happening, okay, I can serve 20%, 30%, 50%, who knows what the number actually is, more clients.
00:23:57.279 --> 00:24:04.079
Well, you can do so in a way where the the it's still healthy on the business side or advisor side, and clients win.
00:24:04.160 --> 00:24:08.480
And how many clients say you can't hire an advisor because the cost is too expensive?
00:24:08.640 --> 00:24:12.720
The, the, the, the cost of entry is just prohibitive for them.
00:24:12.880 --> 00:24:20.400
So, what this does is actually expands access to more people who are actively looking for an advisor today, but just can't find one.
00:24:20.799 --> 00:24:23.039
It opens up services to them.
00:24:23.359 --> 00:24:26.880
Then the final point that maybe final, who knows?
00:24:26.960 --> 00:24:28.319
Maybe more will come up as I talk by this.
00:24:28.480 --> 00:24:39.599
But another point I think is really important is people talk a lot about the impending talent shortage in this industry of the average advisor is older.
00:24:39.839 --> 00:24:43.920
There are more advisors that are aging than there are advisors getting into the industry.
00:24:44.000 --> 00:24:48.799
And at the same time, the number of households needing financial advice is only expanding.
00:24:49.119 --> 00:25:02.559
So as you project those kind of macro trends out a decade or so, there is expected to be a major shortage of advisors who can serve clients looking for that guidance.
00:25:02.720 --> 00:25:20.960
And so if anything, like I think AI could be the saving grace to say, how do we prevent a situation where there's just a massive shortage of people who are dying to get a good quality financial advisor, but just can't because of supply shortage or of prohibitive costs or whatever it is.
00:25:21.200 --> 00:25:24.000
I actually view it as a big positive.
00:25:24.240 --> 00:25:30.160
But I think that the the way that we have to think about it is not human versus AI.
00:25:30.559 --> 00:25:33.920
It it apps it's humans enabled by AI.
00:25:34.160 --> 00:25:35.519
AI is leverage.
00:25:35.759 --> 00:25:41.440
AI magnifies the good work a good advisor does, it magnifies the bad work the bad advisor does.
00:25:41.519 --> 00:25:44.640
And I think as we talked about those advisors, probably get get screened out.
00:25:44.799 --> 00:25:53.119
But like we we were, we recently, someone recently started working using Hazel, altruist AI product.
00:25:53.359 --> 00:25:54.319
I think it's amazing.
00:25:54.400 --> 00:25:55.200
I think it's unbelievable.
00:25:55.279 --> 00:26:11.920
Like when I see what that can do and where it's going, and the fact it's not even that old yet, I it feels like an Iron Man suit that we can put on and just be that much more effective as advisors doing the work that we love doing and not having to do some of the tedious stuff that doesn't add value to the clients.
00:26:12.160 --> 00:26:18.720
We as advisors don't love doing, but just had to be done to enable other aspects of the relationship.
00:26:19.839 --> 00:26:21.279
So those are my thoughts.
00:26:21.440 --> 00:26:34.480
Not predictions, because I think it's going to be impossible to predict exactly where things go, but anything else that is lingering in your mind, Eden, as you think about AI and its future and the potential impact on advisors.
00:26:35.519 --> 00:26:54.400
I think I'd like to hear a little bit more of your perspective, being someone who's been an advisor before, kind of pre-this like massive AI push and is now in a leadership role trying to navigate from the top down, making these decisions about what tools we use, how we use them.
00:26:54.720 --> 00:27:05.279
I'm curious to hear more from you about how you felt the advisor experience has maybe changed since AI has become more part of our day-to-day life.
00:27:05.519 --> 00:27:13.680
And just how you view this as a leader over time and how you approach decisions about incorporating AI into our firm.
00:27:15.759 --> 00:27:24.000
I'm gonna give you an answer and let me know if this is not specifically answering the question because it's the first thing that came to mind, but it might it might be a little different than what you're thinking.
00:27:24.640 --> 00:27:30.319
I went to go get an oil change four months ago, five months ago, whenever it was.
00:27:30.559 --> 00:27:37.759
And I'm getting the oil change, and it's one of those ones like you pull up, you stay in your car, they work underneath it, and then you you drive out.
00:27:38.079 --> 00:27:41.759
And like I went for one thing for an oil change.
00:27:42.079 --> 00:27:47.119
But as I was just sitting in my car and as they were doing it, they're like, hey, do you mind if we do a quick inspection of your car?
00:27:47.200 --> 00:27:48.160
I said, No, of course not.
00:27:48.240 --> 00:27:54.640
So you know, they checked the air vents, they checked the tire pressure, they check the um, do I have windshield wiper fluid?
00:27:54.720 --> 00:28:01.519
They check, and and what they came back to me was like this one-page list that literally had maybe a hundred things that they had inspected.
00:28:02.079 --> 00:28:07.200
And at the end of it, they said, Hey, all 98 of these things are good, but there's these two things that we recommend.
00:28:07.279 --> 00:28:09.119
Your air, your air filter is filthy.
00:28:09.359 --> 00:28:10.319
By the way, here it is.
00:28:10.400 --> 00:28:11.119
And they showed it to me.
00:28:11.200 --> 00:28:12.000
It's it was disgusting.
00:28:12.079 --> 00:28:13.039
They said, Do you want us to replace it?
00:28:13.119 --> 00:28:13.920
And I said, Yes, please.
00:28:14.079 --> 00:28:15.920
And then your tire pressure is a little low.
00:28:16.000 --> 00:28:19.359
Do you do you mind if we um fill that up for you?
00:28:19.759 --> 00:28:31.279
And like as soon as they did that, it's like, oh my gosh, like if all they did was say, Hey, your air filter needs to be changed and your tire pressure needs to be changed, that that's that's valuable to me for sure.
00:28:31.839 --> 00:28:39.200
But it was the 98 other things that they had inspected but didn't make a recommendation on that felt even more valuable.
00:28:39.440 --> 00:28:46.559
And I think that the tie-in to advisory is sometimes we have a meeting with a client and and it's like, hey, there's one thing that we want to talk about today.
00:28:46.640 --> 00:28:48.400
And it's like, that's it?
00:28:48.480 --> 00:28:55.200
There's not yeah, well, there's one thing because we looked at a hundred, but 99 of them are good to go.
00:28:55.359 --> 00:28:58.720
But if if that's not visible, it's not valued.
00:28:58.880 --> 00:29:08.400
And so if we were to create a checklist of, hey, we're having a tax meeting and we're gonna check these, it doesn't need to be 100, but these three, four, five dozen things.
00:29:08.799 --> 00:29:09.759
What's your income?
00:29:09.920 --> 00:29:11.440
Where does that put you in terms of IRMA?
00:29:11.519 --> 00:29:13.359
Where does that put you in terms of capital gains brackets?
00:29:13.519 --> 00:29:15.039
Where does that put you in terms of net invest?
00:29:15.680 --> 00:29:25.359
I'm just making some you could 58 out of the 60, you might have any recommendation for it, but the value to the client is like, okay, it's being looked at.
00:29:25.519 --> 00:29:41.200
Like there's a thorough diagnostic, even if only one or two things are being looked at, from a leadership perspective perspective, as you asked, there is always a balance between how much work, like we've got to prioritize work to be done.
00:29:41.519 --> 00:29:47.839
Because theoretically, like you could spend 100 hours with an individual client to get them to their goals.
00:29:48.240 --> 00:30:00.480
But 95 of those, like what the marginal cost of an additional hour spent or the marginal benefit of that extra hour spent after four or five, six, seven hours per year, it really starts to diminish, is the reality.
00:30:00.559 --> 00:30:08.480
Like if you can get 97% of the value or 95% of the value with like the these core things, you kind of have to make the business decision.
00:30:08.720 --> 00:30:10.480
Like those are the things that we're looking at.
00:30:10.720 --> 00:30:18.720
If we wanted to say, hey, Eden, every time you meet with a client, you need to look at these 60 things on their tax analysis.
00:30:18.880 --> 00:30:19.680
That's a lot of work.
00:30:19.759 --> 00:30:21.599
And it's you know, it's probably just not worth it.
00:30:21.680 --> 00:30:24.000
Like go find the one thing and go do that.
00:30:24.319 --> 00:30:31.680
But now with AI, the cost to do that work is not zero, but practically zero.
00:30:32.079 --> 00:30:38.960
And it's probably gonna do a way better job than you or I could do by ourselves, meaning going through all that.
00:30:39.119 --> 00:30:48.559
So the perception is like, okay, how do we start showing, like, how do we get that version of a oil change tune-up, like the 360-degree review tuneup?
00:30:48.640 --> 00:30:58.960
So it's not just showing the value of what we did, because I don't think we realize this as advisors, but part of the value isn't just what we're recommending or what we're doing, but it's also all the things we're not doing, we're not recommending.
00:30:59.119 --> 00:31:04.559
And we just don't even think to do it because we already know, oh, well, they don't need to consider that or consider that or consider that.
00:31:04.720 --> 00:31:12.160
And we know that because it's second nature, and we've done this so many times, but that's still a huge value add to the client because it might be top of mind to them.
00:31:12.319 --> 00:31:16.000
Or at least if they knew that it was checked, it might be top of mind there.
00:31:16.079 --> 00:31:32.799
So I don't know if that addresses your question, but I think that there's just way more that we can do to fill in the really core amazing elements of our service to clients to fill in the gaps, to fill in the cracks that aren't visible, but would absolutely be a value add to clients if we did them.
00:31:33.039 --> 00:31:42.319
Um the s the second thing, how do we think about AI is I'm not like an AI savant.
00:31:42.480 --> 00:31:52.640
Like I'm not going deep into the models and deep into how like you have to decide what's the every firm now says they've got AI capabilities.
00:31:53.519 --> 00:31:57.680
The overwhelming majority, it's it's almost laughable.
00:31:57.759 --> 00:31:59.599
It's like these this is not an AI capability.
00:31:59.759 --> 00:32:05.599
You threw a generic chat AI chatbot onto your service and called it um, hey, we're AI enabled.
00:32:05.680 --> 00:32:06.880
You're not AI enabled.
00:32:06.960 --> 00:32:10.880
You you slapped a patch on an AI patch onto what you're already doing.
00:32:11.200 --> 00:32:16.799
So you you really kind of have to decide what's the team that we're betting on?
00:32:17.039 --> 00:32:34.319
Like we're we're not gonna go say we need to build out an army of PhDs and AI engineers as much as we're gonna say we need to work with firms that are the brightest, the smartest, the most forward-thinking, and they have that team and they can come alongside of us and help us build the solutions that ultimately better serve our clients.
00:32:34.480 --> 00:32:38.240
So it's it's really about who are you partnering with?
00:32:38.400 --> 00:32:39.519
Like I mentioned, Hazel.
00:32:39.759 --> 00:32:46.559
Hazel, I think, has been amazing, and I think it's just scratching the surface of what it can be and what it will do.
00:32:46.960 --> 00:33:16.880
That was I guess that one was kind of a bet on where it already is, because I think it's already amazing, but it's it was even more so a bet on like this is this is a team that I think is going to absolutely be changing the game when it comes to uh equipping advisors to do their best work, to serve clients better, to allow us, as we talked about as prices come down, great, we can do that and we can like so I think that's the team that's going to be able to um be the horse and we're the jockey that's riding the horse in some regards.
00:33:17.119 --> 00:33:22.319
So I don't know if that answered the question that you had, but those are a couple stories of how I think about it.
00:33:22.559 --> 00:33:23.039
Yeah.
00:33:23.359 --> 00:33:39.359
I think absolutely, and I can just say from the user side, having shifted from ChatGPT to Hazel, the level of efficiency that me and Naomi are able to achieve now is absolutely higher.
00:33:39.519 --> 00:33:48.079
It it has reduced a lot of tasks that were on that more tedious side and just cut down the time that it takes to do it.
00:33:48.240 --> 00:33:51.200
And it's all still involving that jockey riding the horse.
00:33:51.359 --> 00:33:52.559
We're still looking at everything.
00:33:52.720 --> 00:33:54.640
We approve everything, we vet everything.
00:33:54.799 --> 00:34:04.079
It's not doing the role, but the efficiency has certainly increased significantly in the last month or so that we've been using Hazel.
00:34:04.240 --> 00:34:12.000
So I think that's a huge value add for us as advisors, and it flows right through to the client and what we're able to provide for them.
00:34:12.159 --> 00:34:18.320
So I think that's been a great move for our company and what we're trying to use AI to accomplish.
00:34:18.480 --> 00:34:20.079
So I see that firsthand.
00:34:20.239 --> 00:34:30.719
And it just also helps, like you said, really look at absolutely everything that, you know, we could spend 10 hours looking at every single little detail manually ourselves.
00:34:30.960 --> 00:34:36.800
Or we could kind of have AI help us out a little bit and take 30 minutes to look at every single one of these details.
00:34:36.880 --> 00:34:41.280
And then we're able to go through it in a much more streamlined, focused, and intentional way.
00:34:41.360 --> 00:34:44.480
And all of that feeds right through to the client outcome.
00:34:45.199 --> 00:34:46.400
Yeah, I love it.
00:34:46.639 --> 00:34:47.360
I love it.
00:34:47.599 --> 00:34:53.920
Anything else, Eden, that you think uh would be helpful to cover before we wrap up today's episode?
00:34:54.559 --> 00:35:01.599
I think just last point was something that I kind of just thought of as you were talking about this and how much we're we are leaning into it.
00:35:01.679 --> 00:35:02.480
We are bullish.
00:35:02.559 --> 00:35:05.360
We do think this is a useful resource in our industry.
00:35:05.599 --> 00:35:15.199
I think another kind of mental test that can really help confirm where you stand in that quality of advisors is what if Hazel just stopped working today?
00:35:15.360 --> 00:35:16.559
What if it wasn't feeling it?
00:35:16.639 --> 00:35:17.679
It totally crashed.
00:35:18.000 --> 00:35:23.440
Can you still go into all your meetings and deliver a fantastic presentation for your clients and give them that value?
00:35:23.679 --> 00:35:27.760
If the answer is yes, I think you're doing great in the world we live in today.
00:35:28.000 --> 00:35:36.159
If the answer is no, probably need to reevaluate how the tool is being used and where your kind of advisor capabilities stand.
00:35:36.639 --> 00:35:37.280
Yeah.
00:35:38.159 --> 00:35:39.599
I could not agree more.
00:35:39.760 --> 00:35:46.960
I think one sign of a great advisor is a great advisor doesn't actually need technology, doesn't need software to do that.
00:35:47.039 --> 00:35:49.679
Like that you don't need a financial planning projection to do your job.
00:35:49.840 --> 00:35:55.119
I think that too many advisors hide behind the software, not intentionally just thinking, yeah, this is my job.
00:35:55.199 --> 00:35:59.199
I put in the data and I tell the client your Monte Carlo score is 87%.
00:36:00.079 --> 00:36:01.280
Who cares?
00:36:01.599 --> 00:36:04.159
Like if if you that's not the value of an advisor.
00:36:04.320 --> 00:36:07.840
The value of an advisor, you could get rid of the software and they would still be excellent.
00:36:08.079 --> 00:36:11.440
The software magnifies that.
00:36:11.599 --> 00:36:13.840
The AI tools magnify that.
00:36:14.000 --> 00:36:19.599
So it starts with a person that is being magnified, not the uh tool itself.
00:36:19.760 --> 00:36:28.079
Because I do think at the end of the day, there are good, there are gonna be a lot of people that are totally fine using an AI financial planning software and they're good with it.
00:36:28.159 --> 00:36:30.559
And I think there's there's some out there that are that are catching steam.
00:36:30.639 --> 00:36:33.039
I know people that use them, they're totally happy with it.
00:36:33.280 --> 00:36:37.199
But I think this is just giving different like this, it's giving different options to the marketplace.
00:36:37.360 --> 00:36:39.360
Some people are gonna be cool with that.
00:36:39.519 --> 00:36:42.719
I think a lot more people are still gonna want that human advisor.
00:36:42.800 --> 00:36:56.719
And especially if AI can drive the cost of advisors down, that's just it like that's just becomes a flywheel, that it makes it more accessible to more people, but it's and it becomes a thing that I think leads to a better future.
00:36:56.880 --> 00:37:00.719
There will absolutely be disruption for people that I would say are not great advisors.
00:37:00.880 --> 00:37:07.119
I think for those that are, how can we continue to ensure we're not getting complacent?
00:37:07.280 --> 00:37:24.320
We don't get to a level where we've passed a CFP exam or we've you know taken on a certain number of clients or we feel comfortable enough, but there's always that drive to say, I want I'm hungry, I want to be a better advisor, not just because of AI and the fear of that, but like that's that's my duty to my clients, and that's my duty to my team.
00:37:24.400 --> 00:37:31.440
So I think those advisors, if you can just commit to, you might have to relearn some things, start some new things.
00:37:31.519 --> 00:37:39.519
But like I think this is going to be a positive thing for those advisors, certainly over the next few years, and we'll see what happens beyond that.
00:37:39.679 --> 00:37:41.199
But uh thank you, Ian.
00:37:41.440 --> 00:37:46.239
This was a, you know, you came to me with a great episode idea, and I think that this was helpful to walk through.
00:37:46.320 --> 00:37:51.199
And again, who knows what actually happens, but I hope this has been helpful for people listening.
00:37:51.280 --> 00:38:00.960
And for anyone that is listening, if you're enjoying this, share it with a friend, share it with a coworker, share it with someone that you think would enjoy the episode or the podcast, and leave a review if you don't mind.
00:38:01.119 --> 00:38:05.760
Helps more people find the show, and we want the show to be found by more people.
00:38:06.079 --> 00:38:07.599
So thank you, Eden.
00:38:08.239 --> 00:38:09.599
And thank you, everyone who's listening.