AI’s Judgment Day: How ChatGPT-4 is Reshaping Wealth Management

“AI will probably lead to the end of the world, but in the meantime, it will help build some great companies.” –Sam Altmen, Chairman of OpenAI, developers of ChatGPT

The latest version of Generative AI finally hitting the market has brought about something akin to a technological judgment day. Awe, confusion, and fear have spread across businesses of all sectors in equal measure as everyone races to stay ahead of the curve. Rather than simply fighting to remain ahead of competitors, many companies now find themselves fighting to remain ahead of the technology itself.

Rather than simply fighting to remain ahead of competitors, many companies now find themselves fighting to remain ahead of the technology itself. 

While anxieties around AI are warranted, incorporating automation into your business is no longer a question of preference. “If you’re a business leader and you’re looking at the next five years, and you’re not thinking about AI and how it’s going to transform your business– you’re crazy,” Andrew Altfest declared at the recent Pulse360 AI & Automation Summit for Financial Advisors. 

The panel was entitled ‘Using AI to Automate, Scale, and Grow your practice,’ and featured Craig Iskowitz, CEO of Ezra Group in conversation with Anand Seth, CEO of Pulse 360; Andrew Altfest, CEO of FP Alpha; Josh Smith, CEO of VRGL; Rick Williamson, Director of Training for Redtail; and special guest Angel Gonzalez of Snappy Kraken

The discussion focused on understanding types of automation, best security practices, projections for future innovation, and future-proofing your company. Each panelist also demonstrated new AI-based products from their company, showing how the tools will support client journeys and advisor experiences. 

Explaining Automation

In February of 2022, Google search interest in ‘generative AI’ was only 3% of what it became in February of 2023 with the proliferation of open models like ChatGPT and Bard across the internet. Articles and commentary on AI are everywhere, but many people remain confused about what exactly artificial intelligence includes. Smith highlighted robotic process automation– where one action triggers another– as the original form of artificial intelligence which has been around for several decades. 

Despite the ubiquity of robotic process automation, Iskowitz argued that current products which create tasks in the CRM based on triggers, perform marketing automation, and document processing only scratch the surface of what the technology is capable of. He cited a KPMG report, which predicted that robotic process automation is capable of cutting costs for financial services by as much as 75%. 

Iskowitz theorized that much of this growth will be through seamless integrations that users do not even realize they’re interacting with, whether it’s an incredibly accurate recommendation engine or their phone recognizing them. “Users are becoming inundated with AI,” Iskowitz warned, “and whether it’s valid or not, they’re going to start expecting that from their advisor experience as well.”

This proliferation of robotic process automation is now being compounded by other types of AI such as natural language processing (NLP) and machine learning entering the market. Smith used the example of how a chatbot works to explain the difference between natural language processing and machine learning: the chatbot understanding the question from text is natural language processing, and its ability to recognize patterns and produce a logical answer is through machine learning. 

Morgan Stanley has been working on its Next Best Action system for over 10 years to provide its financial advisers with insights to present to clients, using machine learning to identify investments of interest and relevance to a particular client. However, ChatGPT takes this one step further by utilizing a subset of NLP, large language models (LLM), which allows it to interpret the language and provide a rational response back. 

Stepping Up Security

One of the biggest considerations for firms looking to bring in more AI technology is data security. “A lot of AI products are coming out ‘for free’ right now– but nothing is ever free to use, and in those cases the product is your data,” Seth reminded the audience. Much of wealth management firms’ data is made up of sensitive client information, and inserting it into an open AI tool such as ChatGPT or Bard allows the model to then use that data to generate new information for other users. 

Altfest recommended considering first what information is absolutely essential to perform a certain task, and eliminating everything else. He also noted that FP Alpha has their own language model which was built to read legal documents, and that employees are required to delete documents after use so nothing is kept in the model. Pulse360 likewise stores all documents on their own servers rather than being uploaded and saved in the AI system. This approach was echoed by Williamson, who pointed out that there are many creative ways to use AI without putting any sensitive information in. He also encouraged users to stick with AI tools made by fintech companies, as they’ll be required to follow SEC and FINRA rules which other open technology can ignore. 

In response to an audience question asking why Bard (Google’s NLM) is not as popular as ChatGPT, despite having access to more recent data, the panelists agreed that ChatGPT’s main edge resides in it having been released earlier. The four-month gap gave ChatGPT a head start on media buzz as well as more time to develop functionality. However, Seth predicted that this lead will be short-lived, and that Bard will take over in the long run due to its wider access. 

Though AI processing is getting better and better, any content that is machine-generated should always be thoroughly checked and fine-tuned before sending to clients, Seth cautioned. Not only should you check text, Altfest argued, but data-generated insights as well. “The way we go about it is that everything should be explainable by the user– there’s no black box and you know why the insight came about. You can choose to accept it or not to, but you should always know why you got it,” he insisted. 

The Next Big Thing

According to a recent wide-spread survey by Accenture, 84% of digital and technology executives believe that AI will transform the wealth management industry within the next five years. Anticipation for AI innovation is high, but what will those innovations be?

Recent AI products have focused on efficiency in the back office, but Alfest predicted that the next opportunities lie in supporting the day-to-day work of advisors, by automating organizational and communication tasks. The CFP program has begun to reflect this turn as well, adding more emphasis on incorporating automation.

Language models are paving the way for automated communications at a much more complex and relatable level than ever before, such as Snappy Kraken’s enhanced AI content helper as demonstrated by Angel Gonzalez. The new system assists advisors in creating written material to send out to clients in emails and other marketing capacities. In this vein, Seth described Pulse360’s compliance AI tool currently underway which can check emails and highlight text which needs to be checked before it’s sent out to clients. He also noted that another very strong use case for AI is to figure out why a financial plan isn’t currently working the advisor wants it to so that it can be adjusted.

Into the Matrix

Iskowitz sees this type of technology as a harbinger of a bright future for AI and humans working together in financial services. In his experience, “the more firms incorporate AI, the more their employees become engaged.” AI is freeing employees from mundane, manual, time-intensive tasks such as exporting data and building reports, allowing them to move higher up the value chain and spend more time on the services which provide more value for their clients. 

Utilizing AI has become the mark of technological prowess– Smith recommends asking every new firm about their AI policy. “If they don’t have one, you should question whether they actually care about innovation,” he warned. 

In line with this optimism, Altfest pointed out the ways that automation is helping to make more complex financial services available to a much wider range of clients beyond the most wealthy bracket. These effects are already widespread in the industry, visible in the wide accessibility of estate planning, tax planning, private investments, and other areas previously subject to a large advice gap. “When you can take data and instantly turn it into actionable advice, it allows advisors to be more relevant and more involved in all of their client relationships,” Altfest extolled.

The Inevitability of AI Domination

Though most firms are looking towards incorporating AI solutions, more than 80% of firms are stuck in the AI proof of concept stage, with their efforts narrowly siloed within a single department or team. Williamson highlighted broker dealers as perpetually behind the technology curve, though he expressed faith that RIAs and smaller offices will be able to quickly start forging ahead. 

Gonzalez agreed that the great push forward isn’t far off, as “civilization advances to the extent that you can run complex processes without thinking about them.” AI has pushed that ceiling very high, and the industry will follow. 

As advisors strengthen client relationships through AI, Altfest noted that large broker-dealers are looking to do the same by removing intermediaries. They may be slower to change, but they’ve seen the potential gains and have already started working to offer automated services at a very low price point to get more people using their products. 

Becoming Future-Proof

Whenever the conversation of technological innovation comes up, questions about human replacement are soon to follow. Smith expressed trepidation around the effects of AI technology on the job market as many entry-level and support positions by which many people enter the field and start their growth will now disappear. 

To ensure that their firms don’t become obsolete, Seth encouraged advisors to look at their practice and the services they offer to expand upon their specialties and create a brand. The writing is on the wall: if all you do is manage money, a robot can probably do it better. “Add financial planning at the bare minimum,” he urged. “Add specialists in-house, and start looking at your business through the angel of differentiation from the AI that is coming.” 

More Cowbell

The AI revolution is already here and there’s no going back. If you can deploy automation in ways that are secure and well integrated, you’ll set your company on the course for long-term durability in the new landscape. Take the time to understand how AI works and stay up-to-date on the latest innovations so you can make informed choices for your firm.

Most importantly, don’t fear the reaper. Don’t hold back or wait behind with the rest of the pack– go further, build stronger relationships, invest in your niche and specialization. Add more cowbell, because it’s the only way you’re going to be heard.



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at