The so-called “Holy Grail” of advisor technology is a fully integrated stack that communicates seamlessly across platforms. And while this ideal may remain an unattainable goal for the foreseeable future, technologies like artificial intelligence could help advisors get closer than ever before.
This emerging trend and more were the subject of a panel discussion with several wealth management industry leaders at Asset-Map’s virtual AdviceTech.LIVE 2023 conference. The panel was moderated by Debra Taylor, founder of Taylor Financial Group, and included Bill Crager, CEO of Envestnet; Brian McLaughlin, president of Orion Advisor Technology; and Darren Tedesco, president at Advisor360.
Before its acquisition by Orion in April 2022, McLaughlin was the CEO and co-founder of advisor CRM provider Redtail Technology. Unsurprisingly, McLaughlin said, “Everything starts with the CRM.” Only then can advisors gather information about who clients are, so they can show them how their goals are being achieved over time. However, at Orion, McLaughlin said they were “cautious” about the idea of creating an exclusive, full end-to-end platform.
“We believe strongly in open borders, where we integrate outwards,” he said. “We believe in having choice in the tools that they need and how they interact with ours.”
Tedesco said no one program could cover every base and that “all-in-one doesn’t mean everything-in-one.” Instead, he said, what drives productivity is an “integrated experience that looks and feels the same no matter what kind of application you’re using.”
“Integration will never be perfected,” he said.
McLaughlin said spending on AI would help focus on “human-first interactions.” He said the current panic around AI was comparable to that which surrounded the introduction of robo advisors. For its part, Orion has been leaning toward the development of its own AI technology. Orion's BeFi20 tool is a 20-question assessment, which generally takes under three minutes to complete. The result is a snapshot of how much clients worry about money, how they communicate around it and more. Orion’s soon-to-be-released Portfolio Comparison Tool then takes that information and uses AI to produce a narrative advisors can repeat back to the client.
“This helps get in touch with the human emotion of finance and getting to the core of how they feel about money and their wants, goals and needs for the future,” he said. “It’s not always about numbers. It’s about the emotion.”
Envestnet has also been placing significant resources behind the development of its own AI. In January 2019, Envestnet | Yodlee’s conversational AI functionality began using the then-recently acquired Abe AI, a software provider that enables users and financial institutions to engage and interact with one another via mobile- and web-based voice and text. The service uses natural language processing to expand its Intelligence for Financial Institutions and the analytics tool Envision IQ. Looking to the future, Crager said they are seeking to use AI to build on the customer data they already own to anticipate future planning needs.
“The problem with planning is creating the plan,” he said. “We’re automating all that. We’re projecting some of that so advisors can get a head start with their clients.”
Tedesco said AI would increasingly create “a blended advisor experience” for clients.
“The client might not necessarily know where the advisor is and where the technology is. And that’s a good thing,” he said.
Crager said while AI would help integrate and automate certain repetitive tasks, the human element would remain at the center of everything.
“No one is going to replace you,” he said. “You have deep empathy for the needs and experiences of your clients and customers. The technology and the data and the AI is going to give you scale.”
McLaughlin said AI would remain an “assistive technology” to the human advisor going forward.
“The psychology of understanding the client, that’s going to be the key to future success,” he said.
