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Michael Kitces Jason Pereira Hot Ones Wealth Management EDGE Photo by Ledd Lens LLC

Hot Takes From Michael Kitces, Jason Pereira at Wealth Management EDGE

Modeled after a hit YouTube show, two industry experts consumed over a gallon of milk and nearly two dozen progressively hotter wings while discussing topics including AI and the effect of private equity and venture capital on wealth management.

The hit YouTube interview show “Hot Ones” promises “hot questions and even hotter wings.”

On that show, questions are posed to celebrities as they struggle through a gauntlet of 10 ever-spicier condiments—and it is the mix of those pointed queries and responses with physical reactions to the heat that proves the secret sauce behind the show’s success.

The 2024 Wealth Management EDGE conference had its own homage featuring industry gadfly Michael Kitces and Jason Pereira, a senior partner and financial planner at Woodgate Financial.

“There’s been nothing prepped,” Kitces said before the session began. "Whatever you see here is authentic. This is the first time I had to sign a waiver before appearing on the stage.”

Pereira noted an EMT was ready if things got too heated for the pair. Pereira then began serving the wings and the topics.

After donning a blue shirt to match Kitces’ signature garment, Pereira started the session by asking about the relative merits of AI in the wealth management industry. Kitces said he was skeptical about how advanced the current iterations of the technology were.

“It talks like a person,” he said. “We interact with it, but it’s not intelligent … It knows how to put word patterns together.”

Kitces said this technology was in its infancy and had a long way to go before it was anything more than a tool for advisors instead of a replacement. He said enthusiasts had “fallen in love with the idea of what it will be.”

“It’s not that far along yet,” he said.

The one area he saw utility thus far was “solving the blank page problems” inherent in crafting emails for clients and capturing meeting notes.

“It’s a lot easier to edit than create,” he said. “No one gets editor’s block; you only get writer’s block … my expectations are a lot higher than where the tech is.”

The sauces distributed by Pereira were slowly climbing the Scoville scale. And he agreed that advisors should not be concerned about AI replacing them.

“It’s a really good golf caddy right now, but it ain’t swinging the clubs,” he said.

As they consumed more than a gallon of milk and nearly two dozen wings, the zesty discussion turned to the effect of private equity and venture capital on the industry.

“At its core, private equity is good at making money with money,” said Kitces.

Kitces said private equity can positively influence businesses by allowing them to thrive through injections of otherwise unobtainable capital they need to grow. However, the downsides can devastate founders who don’t meet the sky-high growth targets.

“Founders can get written down to zero because you didn’t hit the ginormous numbers the venture capital firm requires,” he said.

Pereira alluded to the recent price increases at Orion and InvestCloud, which he has himself experienced in his own business, as areas where advisors lose out.

“At a certain point, you’re trying to get blood from a stone,” he said. 

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