Three Transitions to Growth

By Bob Veres

You might have heard about this thing called artificial intelligence (AI). I think it’s going to be big someday. 

But before it becomes transformative in the planning profession, advisors are going to need to make some changes. I foresee three stages.

AI Adoption

The first is adoption. My friend and colleague Joel Bruckenstein of T3 recently said that he has never seen so many new innovations popping up in the fintech world, largely driven by AI—which facilitates faster programming, acts as an underlying driver of features, and promises to greatly streamline user interfaces in complex software. The opportunities to leverage tech today are unprecedented.

But Joel noted that advisors have traditionally been very slow to not just adopt new tech but even to look beyond the comfortable suite they’re using today. Rapid innovation meets the stone wall of disinterest in trying anything new.

I wouldn’t outline a problem without offering a potential solution, and this one is pretty simple. Instead of having the founder or senior advisors handle technology assessments, assign a younger advisor, paired with a younger operations person, to stay on top of new ideas and new offerings. The job that a 50- to 60-year-old dreads would be an exciting opportunity for them. And if they find something so compelling that the senior management team decides (reluctantly) to adopt it, there’s a really great change management process they can employ to ease the pain of doing things differently. 

Taming AI

The second stage is going to be taming AI. Right now, AI offers absolutely the worst user interface I’ve ever seen, and that includes the old Ashton-Tate dBase program (okay, boomer!), whose interface was a dot on the screen like the one at the end of this sentence. AI users have to explain what they want AI to do as if they’re talking to a third grader. I don’t know about you, but for me the prompt engineering process often takes longer than the actual doing.

So how do you tame AI? I got a first look at AI programming in a demo with a new program called AdvisorZen. AdvisorZen is five avatars, each with an annoyingly cute AI-generated face, who each offer different kinds of help to the busy advisor. One of them prepares for client meetings, another writes press releases and blog posts, another creates marketing campaigns from scratch.

But the interesting thing about the avatars is that each of them is built on an underlying layer of prompt engineering. You don’t have to type in that you’re a financial advisor; the avatar already knows that. You don’t have to input whole paragraphs describing what a client meeting is; those paragraphs have been input for you.

Then you go through a series of check-the-box quizzes about how you practice, what kind of clients you work for, how often you hold meetings, etc., which feeds a customized second layer of prompt engineering.

I think of it like the machine language that sits on top of your computer, that a higher-level language (C++, say) communicates with, and above that is the spreadsheet or word processor. The programming layers each simplify your interaction with the computer, and the pre-built prompt engineering will do the same for AI.

Of course, advisory firms can (laboriously) construct their own layer of prompt engineering, and I suspect many will. You save these keystrokes in a file somewhere, so whenever a staff member wants, say, an article written, the first six or seven paragraphs of the request can be copied and pasted. 

Presto! AI is no longer quite so user-unfriendly.

Staff Repositioning

The third stage has to do with repositioning your staff. You may have noticed most of the added conveniences to your tech stack over the years have been aimed at the operations team, streamlining paperwork and allowing for the creation of systematized procedures. 

With new AI features and a lot of tech innovation, this trend is going to accelerate, leaving some of your back office ops people with time on their hands. Brett Davidson of FP Advance in London recently showed how advisors can reposition the operations staff to solve a number of problems at once.

First, consider the fact that 70–80% of incoming client calls don’t require the technical expertise of a senior member of the planning staff. They are requests that can be handled by the ops team as a matter of routine. So Brett proposed that, with the free time they’re getting from the fintech world, the ops team becomes more client-facing. Instead of the senior advisor taking those calls, and routing them to the operations department, the ops people field those calls directly, and handle the routine tasks for the client. The phones are answered immediately, and the tasks are performed with lightning speed. 

What about those other 20–30% of the calls? Brett envisions that the client-facing ops team be supplemented by a junior advisor who is technically proficient but not yet ready to manage a group of clients. This person would triage the more complicated requests and handle most of them. Only about 5% of the calls would need to be routed to the senior planner.

What problems does this solve? The first is burnout. Many founders and senior advisors flinch at the idea of marketing their excellent service and advice to a larger cohort of clients. They’re managing too much already. But if they aren’t the primary contact on every client call, they might be more open to sharing their excellent service and advice with more lucky clients.

Second is response time. When clients get immediate service, and especially if the operations staff takes the time to get to know them and inquire about their personal lives and issues, they’re more likely to bond more closely with the firm and tell their friends and neighbors about it. 

The transition and growth opportunities that flow from fintech innovations to taming AI to creating a more efficient client service structure is surprisingly straightforward—and I think it has the potential to give NAPFA advisors some advantages in the marketplace—at least until the rest of the profession starts to catch on.

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Bob Veres is the publisher of Inside Information and one of the strongest advocates of Fee-Only planning in today’s profession. If you think his columns are full of the stuff that hits the fan, tell him so directly at bob@bobveres.com.

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