Artificial intelligence isn’t pie in the sky. It’s clearly here — and to stay. Examples of how AI is helping financial advisors have been well documented.
“Among our clients, advisors using AI are growing at twice the rate of those advisors within the same company who aren’t,” Rob Pettman, president of TIFIN, a fintech platform focusing on AI for wealth management, says in an interview with ThinkAdvisor.
Growth, risk reduction and cost reduction are the chief benefits that financial advisors can realize by applying AI, according to Pettman.
TIFIN, or Technology and Innovation for Finance, targets RIAs, wirehouses, independent broker-dealers, banks and credit unions with two sets of subsidiaries: one focusing on advisor growth, the other on distribution of advice at scale. It is backed by JPMorgan, Morgan Stanley and Franklin Templeton, among others.
“We are in a golden age of applying AI to help deliver better individualized advice … to more people,” Vinay Nair, TIFIN founder and CEO, has said.
Before joining TIFIN earlier this year, Pettman was with LPL Financial for nearly two decades, the final nine as executive vice president of wealth management solutions.
In our interview, he discusses how AI can identify clients with the highest probability of consolidating their assets with their advisor, as well as AI’s capability to conduct due diligence on alternative investments.
Here are highlights of our conversation:
THINKADVISOR: Do financial advisors really need AI?
ROB PETTMAN: When you look at the number of new advisors coming into the business, I don’t think you’re seeing staggering stats. But when you look around your community, you probably see a lot of people who need financial advice.
So being able to equip advisors with tools to help them work with more people and distribute their advice to more people, that’s what our mission is all about.
AI saves time and effort. But why eliminate or reduce cognitive activities — for example, researching and writing — by handing them off to AI? Shouldn’t you be stimulating your brain to the fullest?
Here’s the thing: Wealth management is hard. This is a hard business. There’s a high duty of care.
And to the extent that time is created or solutions are implemented that help deliver more value, wealth outcomes will be better for more people. That’s what we’re after.
So instead of searching for something or spending time drafting a document, the advisor can talk to a client about what’s worrying them.
What are the benefits of AI for financial advisors?
Growth, risk reduction and cost reduction — one, two or all three of those.
Among our clients, advisors using AI are growing at twice the rate of those advisors within the same company who aren’t.
How will AI help wealth management continue to evolve?
Two years ago, folks probably weren’t thinking about experimenting with AI. This year, there are a lot of firms actively experimenting with pilot programs that have a number of AI solutions.
The next step? Firms that have experience will have more broad-based AI adoption and implementation.
Please explain the term, “AI-driven personalization.” You offer and feature that on your website.
It’s being able to deliver insights, portfolio commentary [and more] in consideration of the client’s particular needs and circumstances.
