Conducting Negotiations in Modern Boardroom

Josh Brown wrote on Wednesday:

Good morning from the T3 Conference in Las Vegas, Nevada. A few hundred of the most successful executives in wealth tech are here this week to talk about the products and services they’re building for financial advisors all over America. Everyone is here. This is the 20th anniversary of the event and the founder, Joel Bruckenstein, should be very pleased with the turnout – not just in terms of quantity but the quality of the crowd.

It should come as no surprise that the buzzword of the event this year is AI. People are very excited, and with good reason. There is a shortage of talent in the financial advisory space – one that will persist throughout the course of the decade as the number of wealthy people continues to explode and the eldest generation of advisors ages out and retires en masse. Serving the next generation of wealth while still taking care of prior generations is going to require firms and staffers to scale themselves with technology. We’re all going to have to provide more service, for more people, than ever before.

AI is going to play a role in this but perhaps not in the way many would think. There are two versions of the AI premise and both could be valid. Version one is a handful of new companies will utilize AI to replace human advisors and serve clients directly via chatbots and suggestion engines. The responsiveness will provide the right amount of verisimilitude to make people feel like they’re being heard and cared for and listened to and understood. This premise is wrong if we’re talking about the traditional bread-and-butter client for registered investment advisors of $1 million to $25 million in household wealth.

If we’re talking about the mass affluent – $100,000 to $1 million in investable assets – it’s possible that there could be one or two companies that can build a business this way, but you wouldn’t want to be an investor on those cap tables. It’ll be one more race-to-zero business a la the robo-advisors I’ve recently written the eulogy for (read ‘The Bet’, which is my definitive history of the rise and fall…)

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