ai can be your ally or your competitor

davyde “day” wachell is the co-founder and ceo of responsive ai. he studied ai in the symsys program at stanford and film at columbia. their innovative thinking drives the company’s success by bridging technology and the arts, leading to a culture of creativity and out-of-the-box thinking.

six steps to using it to grow and protect revenue.

by davyde wachell
the holistic guide to wealth management

“there are decades where nothing happens; and there are weeks where decades happen.” – vladimir ilyich lenin

lenin’s quip resonates deeply with any seasoned advice professional. black friday, 9/11, the great recession and covid-19 kept us on our toes when it came to the markets and our clients. big outlier events that disrupt “business as usual” can arise at any moment. these moments can change the lives of our clients, and as a result, the growth and stability of our businesses. our clients can lose their trust in us in the blink of an eye if we haven’t positioned those clients correctly, or if we do not respond effectively to changes in the market.

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how we prepare our business for the unexpected determines our ability to respond to outlier events. how we respond to those events determines how we perform under pressure. staying competitive isn’t about performing well when the sun is shining; it’s about executing and gaining clarity in the fog of war.

instinct, fast thinking and strong communication are indispensable during trying times, but sound practice management and timely insight are ultimately what separates firms that fail from firms that succeed. that’s what gives them the ability to grow, serve clients and protect their revenue during periods of disruption and volatility. if you think your practice is as agile and competitive as it can possibly be, i suggest you stop reading here. history shows it’s probably not.

 

 

remember blockbuster video’s hubris during the early days of netflix and other streaming services? they thought they had an impenetrable moat around their business. how did that work out for them?

the united states armed forces are intensely focused on global competitiveness. the u.s. military spends as much on r&d alone as any other country (i.e., competitor) spends on their entire defense budget. anyone familiar with the manhattan project or the movie “oppenheimer” realizes that waiting to develop new technology or weapons until your competitors have them can cost you the war. as with your practice, you need to be proactive.

“and because time and our competitors are not standing still, we cannot stand still, either. make no mistake, we need defense innovation in every form – from a combination of new technologies and processes to new tactics, techniques and procedures.” – u.s. deputy defense minister kathleen hicks

like hicks, i strongly believe the pace of technological change today is more significant than the invention of the personal computer, the internet and the mobile phone combined. with the rise of large language models, we have a technology that can assume human-level subtasks, synthesize insights from wide swaths of data and perform soft skills such as screenwriting and creating art. ai may not replace humans in the next three years, but humans who use ai will certainly replace humans who don’t. ai can be your ally, or it can be your competitor.

“listen and understand! that terminator is out there! it can’t be bargained with. it can’t be reasoned with. it doesn’t feel pity, or remorse, or fear. and it absolutely will not stop … ever!” – james cameron’s “terminator”

 

 

even today, some financial institutions have told me their advisors have complete and perfect knowledge of their clients. they believe there is nothing to be learned from big data, and that there are no competitive pressures facing them. (i wonder if they still have their blockbuster video accounts.)

but many of you reading this don’t share the same hubris. you may be lying awake worrying that competitors are using machine intelligence to get a superhuman advantage over you. you may realize that a pivotal moment in technology is under way and that being “good enough” won’t be good enough for long.

the only question remaining is this: what superpowers should an ai enhanced advisor have?

four artificial intelligence superpowers for better advisor profitability

“work it harder, make it better. do it faster, makes us stronger.
more than ever, hour after hour. work is never over.” – daft punk

daft punk’s chirpy robotic pop hit “harder, better, faster, stronger” conveys a friendlier version of ai. it’s about the tireless worker who can help humanity do more. a childlike image, but also the clearest way of thinking about how ai can be leveraged without getting into complex jargon and intellectual puffery. what are the “jobs to be done” and how can ai do things “better, faster, stronger” to help us?

to answer those questions, i’ve identified four ai superpowers that can help wealth advisors provide create value for clients and their business:

reduce cost to advise with instant ideas and agentive workflows. this can be achieved by rapidly analyzing data to come up with “next best action,” or by using automation to get work done quickly and with accountability.

increase revenue with meaningful advice. this can be achieved by helping convert leads into new clients, attracting more assets under management (aum) from existing clients, providing high-value services like direct indexing or alternative assets, or by enabling cross-selling of ancillary services like banking products, estate planning or insurance.

protect revenue with proactive risk defense. we can manage risk on the three fronts of client suitability and financial wellness, client flight risk and regulatory risk around compliance obligations.

identify gaps in crm to ensure data quality. the three superpowers above rely on a client relationship management (crm) system and data warehouses that contain each client’s financial situation and preferences. we can use data from different sources, including taxes, to ensure we have an accurate portrait of our clients.

let’s take these superpowers one at a time:

1. reduce cost to advise with instant ideas and agentive workflows.

the average u.s. advisor spends only 25 percent of their time with clients according to think advisor data. that amounts to only 25 days per year for advisors with 100 or more clients. each minute, each client question and each word is important for truly understanding client needs and synchronizing the client’s vision with the advisor’s strategy. advisors need to do more for clients with less time.  we can use ai to analyze data for instant ideas on conversations and actions that help our clients. we can also use ai agents to help us get work done faster with more accountability. below are examples of “jobs to be done” by ai that can help advisors save valuable time:

• instant ideas: analyzing crm data to understand a life situation. is the client’s data up to date, or do we need a refresh on the client’s situation? based on a client’s family situation, can we identify an opportunity for a child education savings plan, or start a conversation about a future home purchase? how about a w-2 rollover because of a job change? finally, we must be aware of required minimum distributions because the client is of retirement age. these are questions that instant ideas can help advisors answer.
• instant ideas: analyzing a portfolio to evaluate risk. is the client’s portfolio carrying more risk than the client has signed up for? are certain funds underperforming? is there an opportunity to reduce fees using different instruments? is there too much concentration in certain industries or risk correlations? these are questions that instant ideas can help advisors answer.
• instant ideas: collating and analyzing taxes to understand a client’s asset base, family situation and income. has the client’s family status changed? could he or she become an accredited investor? do they already invest in alternative assets? do they have business income? have they started spending more on health care? have they claimed an electric vehicle credit and are they potentially interested in esg portfolios? these are questions that instant ideas can help advisors answer.
• agentive workflow: writing client emails to ask questions and propose ideas. can you start a conversation about a retirement re-plan or new service? can you gather some basic facts over email to update suitability and situation? how much back and forth is required to schedule a high-value phone call or in-person meeting? these are questions that agentive workflow can help advisors answer.
• agentive workflow: updating the crm. does the crm reflect the same situation as the client’s taxes? has something changed in the client’s situation that could require an update to their suitability questionnaire? these are questions that instant ideas can help advisors answer.

each one of the “jobs” above requires time to gather information, to perform analysis or to follow a mundane task through to completion. every second an advisor saves on analysis and labor means more quality time that can be spent with clients homing in their priorities. while the time-saving potential of ai is impressive, it can also help advisors determine where to start. for instance, it can help advisors determine which clients or data should be analyzed first to answer the above questions and which are the most important conversations to have with clients or the next actions to take.

 

once we identify the most valuable conversations and actions, advisors can start increasing and protecting revenue by connecting with clients in a more impactful way.

2. increase revenue with meaningful advice.

clients don’t want to be sold a product or service at the wrong time; they want to be advised on solutions that suit their needs based on a two-way conversation. ai can help advisors identify “moments that matter” in the data that give them an opportunity to provide value through advice.

• change of job (w-2), 401(k) to ira rollover. ai can detect in banking or taxes that a client that has changed jobs. this is an opportunity to congratulate your client, connect about any new priorities they have and perhaps engage some planning around a new home or retirement goals. it’s also an opportunity to propose a 401(k) rollover to an ira you advise.
• life stages and changes. below we’ve identified a number of well-established life stages, and a few high-impact life changes. each one of these stages represents different client priorities and perspectives, and different opportunities for you to provide service and revenue.

 

life stage/event	meaningful advice …	… that grows revenue with
childhood	first savings account or savings app	new aum
college	financial planning for student loans tuition tax deductions (parents)
first job	first investment account financial planning for home purchase budgeting
household formation	asset allocation mortgage financing home insurance
family formation	education savings plan life insurance
wealth building	tax-efficient investing asset allocation diversification into specialty investment products
empty nest	reassess financial plan increase savings mortgage refi on home downsize
retirement	income strategy cash flow management full life insurance
health + legacy focus	estate planning
divorce / loss of spouse	tax efficiency on assets, liabilities, gains and losses reassess financial plan reassess or execute estate plan
job loss	budgeting and cash flow reassessing suitability liability management
inheritance

 

let’s look at the life stage/event “empty nest,” which we identify when a client has stopped supporting an adult child. ai can help us detect the event and also accelerate our ability to engage multiple opportunities for advising the client on this important next stage of life.

empty nest: client stops paying tuition for dependent. the example below shows a situation in which ai has detected that esther has stopped paying tuition for a dependent based on her form 8917. this means she is no longer supporting an adult child, or as some people say, “the kid is off the payroll.” esther will likely be taking stock of the next phase of her life, and there are a number of conversations we can have with her that could lead to new service opportunities, or at the very least, just a “moment that matters” conversation. it’s important to understand that life events are more than a one-to-one mapping of an event to a product or service. each life event represents a rich conversation about your client’s objectives that might tie to multiple points of service.

life event	action / service	business value
empty nest: ai detects that client has stopped filing form 8917	touch point	better nps
	re-planning + suitability	less risk
	higher savings	more aum
	mortgage refi	more loans
	full life insurance	more revenue

 

3. protect revenue with proactive risk defense.

in a trust-focused business, mistakes cost client confidence and money. there are three main categories of risks to revenue:

1. compliance risk. is the account out of compliance with regulation? are we at risk of tax or regulatory fines?
2. suitability risk. are we out of sync with the client’s needs, capacity and tolerance for risk? have we correctly understood their goals and priorities and does their financial strategy align with that understanding?
3. flight risk. is the client exhibiting behavior that indicates they might leave our service? is there a performance or suitability risk that might impact their perception of our service?

let’s look at some opportunities for proactively managing risk.

cost-conscious change point. ai can detect changes to a client’s spending habits that indicate they are becoming more cost-conscious. it’s important to connect with the client and understand the root cause of behavior change. it could mean the client is worried about losing their job, or perhaps saving for a home, or simply less comfortable with the state of financial markets and their future. this is a good chance to connect and reassess investment suitability or potentially do a re-plan around changing priorities. a cost-conscious client could end up choosing a higher savings rate, which would increase assets and revenue.

4. identify gaps in crm to ensure data quality.

“there are known knowns – things we know we know. we also know there are known unknowns – we know there are some things we do not know. but there are also unknown unknowns, the ones we don’t know we don’t know.” – donald rumsfeld

thinking about all the opportunities and risks above, a simple but devastating question might be: “how could i know something big has changed for my client if i haven’t asked them?” understanding a client’s financial situation and goals is critical to providing good advice. these are what rumsfeld would call the “unknown unknowns.” scanning data, especially changes, is the secret to turning these unknown unknowns into “known knowns.” the table below shows data sources and how they can help advisors know:

 

data sources	data subset	what you can know
crm	basic info	what you ask your client and enter into the system
crm	planning info	what you ask your client and enter into the system
custodian	portfolio	asset allocation, investment preferences, high-fee funds, low-performing stocks, suitability risk
banking	spending + transfers	cost-conscious change point, family spending change point, transfers to competitor
	income	business income, hnw client prospect
taxes	life situation	marriage status, children dependents, elder dependents
	income	employment income, business income, rental income, investment income
	assets + liabilities	bank accounts, alternative assets, private business, mortgages, tuition loans

 

scaling advice excellence: the iq/eq arms race

“the most effective financial advisors possess a unique combination of both high iq (intelligence quotient) and eq (emotional quotient). … in the dynamic world of financial advising, it’s not just about crunching numbers; it’s about building trust, understanding emotions and forging lasting relationships.” – scott reddel, managing director of capital markets and wealth, accenture new york

i have found over my career that in the competitive battle for client trust, advisors who use their time effectively to demonstrate analytical and emotional understanding are going to have the strongest relationships and businesses.

ask yourself which sort of advisor is going to win in the future: an advisor who goes deeper and wider on client needs in a conversation based on the best possible understanding and preparation … or … an advisor who covers only what they know based on a limited time analysis of the client’s situation?

who is going to win between an advisor who has instant insight about their clients … or … an advisor who must crawl screens, reports and data to get insights before every meeting?

obviously, it’s the advisor who can have deeper and wider client conversations and who can pull up instant insight about clients before every meeting.

why it’s hard for wealth businesses to start accelerating with ai

there are many challenges in accelerating ai adoption and solutions in advisory organizations, including the following:

• rapid pace of technological advancements
• challenges faced by mature advisors in adopting new technologies
• cross-organizational challenges of ai adoption
• pitfalls of relying solely on vendors or external solutions
• importance of feedback loops in ai adoption

technologies are being released faster than businesses and workers can keep up with them. the challenge of deploying technology across an organization can be fraught with risks that sometimes seem to outstrip the benefits. veteran advisors who are still adjusting to video calls and crm might not be enthusiastic about having to adopt even newer ai tools. resistance to change is natural but procrastinating about making changes  only makes future adoption more arduous.

harnessing ai is a multifaceted endeavor, impacting virtually every department within a wealth management firm, from it and data governance to sales, marketing, compliance and operations. implementing ai is not merely a technical challenge, but a political one. it necessitates a holistic approach, involving cohesive systems, protocols and governance for its safe and effective usage. proposing changes in standard operating procedures can be viewed as disruptive, leading stakeholders to become defensive and resistant. moreover, advisors might view new tools, especially those that alter their conventional workflow, with suspicion.

an ai for wealth acceleration strategy: start small and scale

staging ai tools at an enterprise level via small experiments is a strategic approach to avoid large-scale disruptions and to ensure that the tools are fit for the intended purpose. here’s a six-step approach for doing this:

1. define goals and start small. determine the business challenge. for example, morgan stanley aimed to boost client engagement because it leads to higher revenue. understand your strengths and limitations, align with company goals, and pick a focused project area. don’t risk key business functions at first. morgan stanley’s “next best action” is a great example. it uses ai to match thousands of investment ideas with client preferences.
2. gather data. starting with the problem you want to solve, start with readily available and organized data. ensure that it’s relevant and of high quality. don’t be afraid to open a spreadsheet and try calculations by hand.
3. pick the right ai tool. research available ai tools. choose those that are scalable, well-supported and that fit your needs. start with basic models and advance as needed. be honest about your internal team’s expertise and capability. less flashy tools might mean better long-term results.
4. test, implement, refine. when the model works well with test data, try it in a real-world setting on a small scale. use this phase to spot and fix unforeseen issues. involve a small enthusiastic group of users at first. listen carefully to how the tools are working for your front line. you need buy-in from these early adopters to scale up.
5. monitor and scale up. keep an eye on the deployed model’s performance. update it based on data shifts or changing conditions. if initial tests go well, expand the use of the tool. make sure your infrastructure can handle growth.
6. engage stakeholders and gather feedback. keep stakeholders in the loop from the beginning. get feedback on early results and tweak as needed. set up an easy way for feedback collection. positive results can gain more organizational support and boost stakeholder confidence.

putting it all together

the race for client trust and advisor capability is accelerating due to breakthroughs in ai. it’s time to decide whether ai will be your ally or your competition. by having a clear framework about how ai can deliver client value, you will be better positioned to compete. the profitability of your business is powered by revenue at low cost. pick a focus area in practice management or client service in which ai can make an impact for you. a reliable source of quality data will power the insights you need to do better for your clients and your business. if you start small with a grounded sense of internal capability and budget, you will position yourself for success across your organization for the future.

 

 [arrowroot family office disclaimer]

posted on january 4, 2026