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AI, Support, and the next frontier of RIA scale

AI, Support, and the next frontier of RIA scale

According to a recent Kitces study, a three-person RIA composed of one lead advisor and two supporting resources generates 4x the revenue of a solo RIA. In other words, adding two support resources yields 33% more revenue per employee. 

Delegating tasks like account opening and funding, billing, reporting, data reconciliation, and compilation gives advisors the capacity to serve more clients, improving the firm's economics. Augmenting administrative tasks (and other non-client-facing tasks like rebalancing and tax management) with technology unlocks even greater levels of efficiency. Here is an example of how one firm cut its client onboarding time–defined as opening accounts, initiating transfers, setting up tailored asset allocations, rebalancing portfolios in a tax-sensitive manner, and establishing reporting and billing–by 91%.

The scale advantage of support resources will continue improving as technology drives greater efficiency across administrative and non-client-facing tasks. 

The firms with the best economics will have the most technologically empowered support staff

It’s the key ingredient for 1) maximizing revenue per advisor and 2) improving advisor support staff ratios. I.e., a single advisor can take on more clients, and a single support role can manage the administrative needs of more advisors. 

When we look at the areas that represent blue-sky opportunities to improve and augment administrative and non-client-facing tasks, it’s clear that AI represents the next frontier of technologically empowered support staff. Specifically around speed (completing more tasks faster) and information (capturing, synthesizing, recommending, etc.). 

This article will explore three simple ways RIAs can begin equipping their staff with AI tools.

Before we dive in, two caveats: 

First, don’t put the cart before the horse – there's low-hanging fruit that support roles equipped with modern technology can help you tackle before you go down the AI road. This topic is covered in detail in a recent episode of The Advisor Journey podcast (Navigating the AI Future for RIAs and More).

Second, it’s still very early for a lot of this tech. What it will become is much more powerful than what it is now. Dipping your toes in while it’s still very early will likely improve your ability to adopt more powerful features later. 

The Road to One Hundred Million

3 simple ways RIAs can equip their support staff with AI

Client Meeting Notes automated note-taking, transcribes your meetings, generates summaries, and analyzes conversations–searching for patterns. The tool not only transcribes and summarizes meetings but can also be integrated with CRM systems. This integration allows for seamless updating of client records, ensuring that important insights and action items from meetings are captured and acted upon. Additionally, its pattern recognition can help identify trends or recurring concerns among clients, aiding in proactive service and personalized advice.

Personalization and prioritization recommendations with CRM

CRM integrated with AI not only tracks client details but also analyzes and predicts their needs, enabling the creation of personalized communications. Solutions like Salesforce Einstein and Hubspot-ChatSpot exemplify this integration. This advanced CRM goes further by optimizing workflow management and prioritizing tasks by client importance or urgency. This prioritization allows support staff to concentrate on critical activities. Additionally, these tools can automate regular communications, guaranteeing consistent and prompt updates to clients, thereby enhancing engagement and satisfaction.

Develop copy for email outreach, content creation, and internal comms with ChatGPT

ChatGPT has emerged as a versatile tool, significantly aiding support staff in crafting client emails, meeting notes, and outreach material. Its capabilities extend beyond email creation to include educational content and content research, marketing materials, and social media posts, which are essential for maintaining a consistent and engaging digital presence. While ChatGPT streamlines the content creation process, it still benefits from a human touch to ensure brand alignment and accuracy, enhancing client acquisition and retention.

If you are hesitant or apprehensive about generative AI tools like ChatGPT, start with low-risk use cases. For example, you could ask it to create an outline or a draft. Another use case is to ask it to evaluate a client's communication against an “effective client communication rubric.” In both instances, the “real work” is still being done by a human, but the tool provides helpful guidance and feedback to improve the material.

Things to Consider About AI

One primary concern is the misconception that AI might replace human roles. In reality, AI heavily depends on human supervision and input, and people still favor human judgment. Privacy and security, particularly with sensitive client data, are valid concerns, thus positioning AI as more appropriate for support staff's administrative tasks for the time being. Also, consider the privacy policies of any AI tools you want to use, and make sure you’re keeping client information secure.

The integration of AI into firms is not without challenges. Varying comfort levels with technology among staff can lead to diverse onboarding experiences, sometimes stretching over months. Support from vendors and resources like YouTube tutorials can be invaluable during this transition. 

The Evolution of AI in Support Roles

AI marks the next phase of technology-enhanced support. This evolution is not just about automating tasks; it's about fundamentally enhancing the strategic role of support staff. By leveraging tools like, AI-integrated CRMs, and ChatGPT, RIAs are streamlining workflows and opening new avenues for productivity and effectiveness. Though still in its initial stages, adopting AI is less about keeping up with trends and more about preparing for future success in an increasingly technology-driven industry.
To learn more about how advisor tech changes the financial industry, tune into this episode of The Advisor Journey: Navigating the AI Future for RIAs and More.

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