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Cory McCruden, EY, Ron Bullis, LifeWorks, R. Scott Victoria, Trade PMR
(L-R): TradePMR COO R. Scott Victoria, LifeWorks Advisors CEO Ron Bullis and EY's Cory McRuden

Wealth Management EDGE: Future Advisors Will Have to Pick Up Where AI Falls Short

A focus on behavioral science and emotional intelligence will be key for advisors who wish to remain relevant in the coming years.

Ron Bullis, CEO of Lifeworks Advisors, has a simple question for advisors who wish to remain relevant in the coming years to ask themselves: 'What is the thing I do that is truly valuable that isn’t replicable by technology?'

Bullis said when consumers can use tools like generative AI to obtain the same technical answer they would otherwise get from a paid advisor, but for free and at lightning speed, the days of being able to charge a 1% AUM fee are numbered.

“Buckle up, guys, this is coming,” he said. “We live in 'Happy Land' right now. Margins are at an all-time high. Interest rates are at all-time lows. The custodians are doing a great job marketing services and pushing growth to RIAs through referral programs. The market has been kind to us. But it’s not going to be this way forever. What happens to every other industry that exists in Happy Land? It gets disrupted.”

This frank analysis was part of the “The Generative AI Tipping Point: Imagining the Wealth and Asset Management in 2034” session at Wealth Management EDGE at The Diplomat Beach Resort in Hollywood Beach, Fla. Bullis was joined by Cory McCruden, managing director of wealth and asset management at Ernst & Young, and R. Scott Victoria, Chief Operating Officer at TradePMR.

Following the session's theme, Bullis used trends to extrapolate what the industry would look like in a decade.

“Demographics take multiple generations to change, and reality wins in the end,” he said.

By 2034, he projected around half the baby boomers would be dead, the average age of an advisor would be pushing 70 and tens of trillions of dollars would have been transferred to millennials.

Victoria added that the rise of generative AI, which is still relatively fresh in the public consciousness, is also contributing.

“AI is very transformative,” he said. “Ten years go by in a blink of an eye.”

Bullis said machines would not replace advisors, but clients’ expectations are already changing.

“The next generation of wealth creators are going to expect things to be instantaneous, updated and connected,” he said. “If the rate of change outside your firm is greater than the rate of change in your firm, there’s only one outcome: You’re being left behind.”

Bullis said he had to rethink the training he received early in his career. In the past, advisors provided access to the market. Then, the value proposition became more planning-related. 

“Ask yourself, ‘What is the most valuable thing I do for my client?’ If your answer is ‘manage portfolios,’ you’re going to become Blockbuster,” he said.

Victoria said services like Netflix and Amazon have already trained consumers to expect these platforms to know them better than they know themselves. To compete with AI, advisors must focus on behavioral science and emotional intelligence.

“The next generation needs to be prepared when AI falls short,” he said.

Victoria said there is an opportunity, though, for advisors who are willing to embrace AI.

“Using AI to help prospect and market is going to be great for those that can recognize their own weaknesses,” he said. “You’re going to have this aid in generative AI, but it’s how you communicate, not what you communicate that’s important.”

TAGS: Technology
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