How do Trump and Biden Feel About Crypto?

Plus, how generative AI is transforming the financial advisory field

Ric Edelman: It’s Friday, July 12th. And Joe Biden, he’s still in the race. 

On today's show, it's Trump versus Biden, their stance on crypto. Plus, an interview with three experts, Vib Arya, the COO of Shufro Rose, Ron Bullis, the CEO of Lifeworks Advisors, and Dr. Sindhu Joseph, the founder and CEO of CogniCor.  

I've done a couple of podcasts for you over the past few months about the upcoming presidential election, and I've repeated the phrase that has largely dictated most elections of the modern era.  It's about the economy, stupid. I believe that a great many Americans are single issue voters. Some will vote based on the Roe v. Wade debacle that we're facing right now, with states across the country interfering with the right of women to choose. Some are going to vote based on their views of the immigration issue. Some are emphasizing Ukraine and Israel. Some will focus on the environment. And for sure, some will be laser focused on the personal character of, well, at least one of these candidates.  

But I think some people will be paying attention more than any of those issues to their own financial status. Are you better off now financially than you were four years ago? And under which candidate will you be better off next four years? I'm not saying that voting based on a single issue is the right way to decide how to vote. I'm just saying that's how a lot of people do it. And if it does come down to the fact that the election is all about the money, then we have to acknowledge that a big category within the money silo is crypto. This is the fastest growing sector of asset management. It's a $2.5 trillion market. it rose 160% last year, it's up another 60% again, so far this year. And I'm on record of saying that bitcoin, currently under $70,000, is going to hit $420,000 by 2030, a five-fold increase. 

A whole lot of people believe that crypto is the best wealth creation opportunity that's available this decade. In fact, so far this year, 700 professional investment firms have reported owning $5 billion worth of bitcoin ETFs. This info comes from the 13-F filings that firms have to file quarterly with the SEC. And for sure, the actual number is a lot higher because only the firms with a hundred million or more have to report their holdings. There are tens of thousands of financial advisors that manage less than a hundred million, small mom and pop firms that serve 100 or 200 clients, you know, like a small accounting firm or law firm. And none of them have to report to the SEC. So when I tell you that there are 700 firms owning $5 billion worth of bitcoin, the actual numbers are definitely much higher. Some of these are in fact, really big companies.  

Bracebridge Capital, that's a hedge fund, and they disclosed that they've put $434 million into the bitcoin ETFs. Another hedge fund, Millennium Management, they invested nearly $2 billion. Susquehanna, they're a quant firm, they invested $1.3 billion. Morgan Stanley's been buying, the State of Wisconsin Investment Board, they manage the state's pension funds. They disclosed a big investment in bitcoin too. In our March survey of financial advisors that do every quarter, this one sponsored by Franklin Templeton, 35% said they planned to recommend digital assets to their clients within the next six months. Back in December, it was only 21% who said that. So we've seen a 50% increase over three months in the number of advisors who say they're going to invest in bitcoin.  

And a new poll says that a third of voters say they'll consider the candidate's views on crypto when they vote. And three quarters say that any presidential candidate should know crypto. This isn't surprising, because a third of Americans own crypto. Like I said, most people tend to be single issue voters. And if you're one of the people who think a lot about bitcoin, you're probably one of the people who also think a lot about the federal debt and the deficit, as well as inflation, the Federal Reserve, and the role of the US dollar on the world stage. That's because bitcoin is an alternative money system. It competes with the dollar. That means that the government policies that affect the economy and the dollar have implications for bitcoin's price.  

So, with all that said, how did Joe Biden and Donald Trump feel about crypto? How they feel is important. Because it's now a campaign issue, and it's an issue for you if you own bitcoin, or if you're an advisor who's recommending bitcoin, or if you're just crypto curious, and you're thinking about bitcoin. So given all this, exactly how did Joe Biden and Donald Trump feel about crypto? 

Well, four years ago in their 2020 race, neither one of them said much about it, and what little they did say was pretty low key, it was pretty negative and it's pretty much in sync with each other. Crypto was definitely not a campaign issue in 2020, but it sure is today. It's a campaign issue. Not only because a third of the country now owns bitcoin or some other digital asset, it's a campaign issue because the crypto community is making it a campaign issue. 

The crypto community is fed up with not getting any laws or regulations passed to govern the industry. And even more fed up that the SEC keeps filing enforcement actions against crypto companies, arguing that they're not following rules that the SEC hasn't even created. Yeah, it's Orwellian. 

So the crypto community has created a bunch of PACs, political action committees, so that they can get the attention of Congress, and they've raised $200 million dollars, and they're using that money to defeat candidates who hate crypto. They've already succeeded in helping defeat several anti-crypto Democrats in the primaries, and now they're targeting a lot more. 

As I told you in my podcast a couple of weeks ago, the link to that show is in the show notes. So when it comes to crypto, 2024 is proving to be very different from 2020. Both of the candidates have been declaring their views. And if you think the election is about the economy and you think crypto is an increasingly important part of that economy, then what Joe and Donald are doing and saying matters a whole lot.  

Let me summarize for you where they stand. I'm going to start with president Biden because he's the one who's in office. Donald Trump can talk about stuff, but president Biden can actually do stuff. So let's first look at what he's doing. In short, president Biden is working hard to kill crypto. If he succeeds, he'll wipe out trillions of dollars of investor value, and he'll destroy tens of thousands of high paying green jobs.  

What did he do that makes me say that he's trying to kill crypto? Well, for starters, he appointed Gary Gensler as head of the SEC. And Gensler has spent the past three years doing everything he can to kill crypto to the consternation of pretty much everybody. Not just the crypto community, but Congress and the financial services industry. Everybody hates what Gensler's doing. Everybody that is, except Joe Biden and the people Joe is listening to, like Elizabeth Warren and Bernie Sanders.  

But President Biden's war on crypto isn't just his unleashing of Gary Gensler on crypto. The Biden administration has also introduced a proposal to hit Bitcoin miners with a 30% excise tax. It's called the Digital Asset Mining Energy Tax, and if Congress were to pass it, it would immediately kill crypto in the US. Miners would have to leave the United States and go to other countries that are more favorable to them. And there are dozens of them around the world that would welcome them with open arms, including Israel, South Korea, Australia, the United Kingdom, and France. Biden tried to get this new tax put into law for the 2024 budget. Congress refused. He's now trying again for the 2025 budget. If he wins the election, and if Democrats control the Congress, you can bet that this tax will become law. 

This idea shows just how stupid policymakers can be. They seem to think that bitcoin miners will just sit there and pay the tax. Nonsense. They'll leave the country. Same thing happened in China when that country decided it didn't like the wealth that bitcoin was creating for people. So the miners didn't take it. They left China, and they came to the US, and they have set up mining operations in 41 states. If they have to pay a 30% federal excise tax, they'll pack up and leave just like they did before, and they'll take their jobs with them. So that's Joe Biden. He hates crypto.  

Donald Trump has made his own stance clear. At a recent speech, he said, and I quote, “I will ensure that the future of crypto and bitcoin will be made in the USA. Our country must be the leader in the field.” He also said, “I will support the right to self-custody for the nation's 50 million crypto holders. I will stop Joe Biden's crusade to crush crypto, and I will keep Elizabeth Warren and her goons away from your bitcoin.” On Donald Trump's website, you can even donate crypto to his campaign – can't do that for Joe Biden's campaign. Trump has even launched his own NFTs to raise money and Trump personally owns crypto. His digital wallet holds coins and tokens worth $10 million, according to Arkham Intelligence. They track data on the blockchain. Donald Trump owns bitcoin, Ethereum, and his own token called MVP.  

But there are also three things that have some people in the crypto community concerned about Donald Trump. First, he said he'll commute the sentence of Ross Ulbricht. Ulbricht is the guy who ran Silk Road, the dark web black market that the FBI shut down back in 2013. Ulbricht was convicted of selling everything from illegal drugs and pornography, to forged IDs and weapons. The court cited six people who died from the drugs they bought on Silk Road, and another five people Ulbricht tried to have killed. He’s serving a life sentence with no chance for parole, and Trump says he'll let him out of jail.  

Trump also said recently that he will never allow the creation of a central bank digital currency, failing to allow the Fed to do this means we're stuck with printing our money, like we've done for the past 200 years. Even though 134 other countries, representing 98% of global GDP, they're all exploring CBDCs, 19 of the G20 are in advanced stages. We're the only ones who are not. 11 of them are already doing pilots, but we are nowhere on this, which is criticism of Biden, and Trump says he won't allow it, a bad mark for him too. And guess what? Brazil, Russia, China, India, South Africa, the BRIC nations, they're all racing ahead. China's digital currency already has 260 million users. So Trump does not get a good score on this one. But then again, neither does Biden.  

And finally, about his website that lets you donate crypto – well, it's great that you can contribute bitcoin, Ethereum, XRP, Solana, and Cardano, but Trump is also letting you donate Dogecoin and Shibu Inu. These last two are meme coins that most agree are nothing but scams. I get it. He's appealing to fans of these coins who've made a lot of money in them, and he's willing to accept the coins. That's a tactic endorsement, and I think a little unseemly, and that is certainly a phrase often applied to Donald Trump. 

So there you have it. If you're a single issue voter, and if that single issue for you is the economy, and if within the economy you are focused on crypto, and as of right now, you're going to vote for Donald Trump. Joe Biden has less than five months to change his views on crypto to eliminate this as a campaign issue. I hope he does so that those who are voting for crypto can cast their vote for a different reason than this one. Because frankly, we've got a lot more important campaign issues to fuss about than crypto.  

Coming up next on the show, a question that I got from one of our listeners. I got an email from David in Virginia. He wrote the following: “Aren't NFTs the future of games and music and more? What will be the impact to mutual funds and ETFs? I have more questions than answers, but wanted to make sure we are ready for what comes next. Dinosaurs don't survive.”  

David, you're exactly right. NFTs are the future, not just of gaming and music and more, but yes, that of the entire asset management industry. Mutual funds are quickly being replaced by ETFs. And ETFs are going to be replaced by NFTs likely over the next five to 10 years, because this is simply a technological innovation that allows you to obtain, manage and distribute assets faster, cheaper and safer than you can with existing technology. This is why exchange traded funds have become so popular. They are a big improvement over mutual funds. Mutual funds were invented, or I should say brought into this country in 1924, codified by the investment company act of 1940. Mutual funds became the most popular investment vehicle in America for all the good reasons, but ETFs did mutual funds one better, and they were able to come into being thanks to the advent of computer technology. And ETFs now allow their shares to trade throughout the market day. Whereas with a mutual fund, you're told the price only once a day at 4:00pm, when the market closes. ETFs trade all day long, like stocks. So, you know moment by moment, what the prices of your ETF, whereas you don't with a mutual fund.  

Also mutual funds only report their holdings twice a year in arrears, semi-annually and annually with ETFs, you know, in real time, what the holdings of the ETF are at all times. Mutual funds are very expensive tax wise. They pay annual capital gain distributions that are beyond your control. But ETFs are highly tax efficient because of the rules that they operate under with the SEC. So this is why ETFs have become so much more popular than mutual funds. And now it's predicted this year, for the very first time, there will be more assets in ETFs than in mutual funds. And so many people who have been holding on a mutual funds for years, just out of habit are beginning to realize they are not doing as well. They're able to shift over to ETFs because in addition to all the other benefits I've already touted, ETFs are also cheaper than mutual funds, often 50%, 60%, 70% cheaper. 

So this is why ETFs are eating the lunch of mutual funds. But next, what's coming? NFTs, non-fungible tokens operating on the blockchain technology where we are now able to tokenize the shares of assets and they can now trade 24/7, not just 9:30am-4:00pm. Monday through Friday, except holidays. They are even cheaper than ETFs. They are faster, they are offering a tremendous amount of technological innovation, not least of which is inclusion and low cost and low investment amount minimums. And so we find tremendous potential and opportunity here. And some of the biggest ETF companies in the world, such as Franklin Templeton and Blackrock are already leading the way in tokenization of assets that are going to revolutionize the industry. 

So it's all really very exciting. But I don't want you to think that this means that what we've been doing in the companies that we've been dealing with are all going to go away. You made the comment dinosaurs don't survive – David yes, they do. Today, dinosaurs are called birds. You can send me your question as well, just send it to Ask Ric at TheTruthAYF.com - the link is in the show notes. 

Coming up next, an interview with three experts, and they're going to share how financial advisors can use generative AI to improve their practice and client services. 

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Ric Edelman: Welcome back, The Truth About Your Future continues. The following interview is with three experts, Vib Arya, the COO of Shufro Rose, Ron Bullis, the CEO of Lifeworks Advisors, and Dr. Sindhu Joseph, the founder and CEO of CogniCor. I interviewed all three in a panel discussion at Wealth Management Convergence, back in March. 

Ric Edelman: So we're gonna launch into our conversation for today and we're going to begin with the most innovative of all subjects, of course, that I think is the number one topic that you're interested in here, and that is AI. So please welcome, to the podium, Vib Arya, Ron Bullis, and Sindhu Joseph. Clearly you are all recognizing that AI is a huge thing. It is undeniable. One of the fears that advisors have is that AI is going to put you out of business. Let me just allay that. I don't really want to spend a whole lot of time talking about that element. What really matters is not that AI will put you out of business. But that financial advisors who use AI will put you out of business. So you need to learn how to understand this tech and use this tech. And that's what we're really going to be talking about here. And so Ron, let me start with you. Answer that first basic question. How can advisors use generative AI in their practices today?  

Ron Bullis: So we've been using it at our firm now since September of last year. We have our own custom ChatGPT, AI chat bot. It's very interesting and that one thing that I would say is unique is because we own all of our own data. We're also a software company. So we have some very interesting kind of like insights. So we rolled it out to all of our advisors, so it's not like I have years and years of data on this. 30% of them use it every day for almost every communication with their clients. Write me an email about the performance of, fill in the blank name of a client, and explain it compared to the broader markets. Five seconds later, a perfectly written email comes out. Now, 70% of them don't use it every day. In my own firm, modern, we built our own technology. And so I started asking them, why? And they're like, well, you know, it's just easier for me to write it. So when I, when a little bit to get to this, which is maybe not fully the answer, but AI isn't going to put advisors out of business because there'll be a large group of advisors that are just going to not adopt it. So, it might put them out of business ten years from now, right? But I will say that we can already see a massive productivity difference, between the ones that are starting to use it and the ones that aren't. And so as I think about how to answer that question maybe to all of you, right? From HubSpot, to GoHighLevel, to Grammarly, to Google, like, pretty much every marketing platform now has some LLM plugged in underneath it, or some type of AI engine to help you write. If you're not using it for social media posts, like, that would be a low hanging fruit. Whichever platform you write, give it some context, ask it to write a post, and it'll write you hundreds of them in mere minutes. So when advisors say like, I don't have time to do this, that, or the other, or I don't have time to write a newsletter, or I don't have time to write a client file, it's like, no more excuses. So how should you guys use it? I would start by thinking about ways, which there are things that you put off doing because you're too busy or you're a little like, maybe like me, like, well, I'm going to write something and then it's not perfect and I don't want to put it out there because it's not perfect. And so then I don't put it out there and then our marketing people are like, nobody cares if it's perfect. Right? That would be one way I would say people should just jump in and start using it.  

Ric Edelman: So let me ask you from a logistic perspective, think about it all in from the moment you first touch the keyboard to the moment you're done, we know the traditional way, if I'm going to write something to a client, I can anticipate how long it takes me to do that. Instead, using AI, such as ChatGPT, how long will it take as a comparison? Because if I'm not going to write an email to my client, I have essentially have to write an email to ChatGPT to tell it what I want it to do.  

Ron Bullis: Yes.  

Ric Edelman: So is it really a big time savings? All that, you know, from door to door, is it really a time savings? 

Ron Bullis: Massive time savings, but I would say where I see it's a time savings and this isn't a sales pitch from my firm, but because we own the data and our engine, our ChatGPT engine has access to our client data, it can write a highly personalized email with very few prompts because we've already trained it on our investment methodologies, our visions. We've ran all of the videos of me speaking through it, all of our social media posts. So we fed it a bunch of information about Lifeworks and we've taught it how to write in, let's say the Lifeworks voice. So if you own your own data, huge step. If you don't, there's lots of these tools coming online. If you have the ability to train it on your investment philosophies, you're writing your videos, your language, you will be able to speed up in ways that's incredible. Like if I could show you guys this on the screen, I can do a voice prompt in here that says, write me a summary for Ron Bullis explaining his year-to-date performance of his investment accounts compared to the broader markets. I'd hit send. Five seconds later, I have the email back with all the return data for our clients, compared to the S&P 500, the Barclays egg, and narrative around it. It truly is a game changer, but you have to connect it to your data on both the here's my practice and here's what we do, and then also your client data. 

Ric Edelman: And how much effort did that take to, you talk about how you fed it all of your content. How long did that take and how do you do that?  

Ron Bullis: It took our team, something like 90 days to kind of roll out the first version of it, and we're still in what I would call like version one point something. We have Google Workspace and Enterprise Edition, so like all of our communication happens through there, right? So drive, docs, video calls, voice text, and so Google's got obviously really great APIs to access all that data, right? So we think about it like, layers of data, like instead of trying to have it consume everything, like every email and all this stuff, we started with like the highest level things like investment philosophy, how we manage money. Things like that. And then it's an ongoing process, right? So as we produce new content or as new answers come up from advisor meetings that we have recorded, we put that in there.  

Ric Edelman: And you can very simply upload your data to a site. And you simply tell the AI go to that site. 

Ron Bullis: Correct.  

Ric Edelman: And so just like you would say to a client, you know, go to my website, click on this to find what you're looking for. You just tell GPT to do the same thing.  

Ron Bullis: Correct. Yeah.  

Ric Edelman: Vib, how are you using AI?  

Vib Arya: Yeah. I mean, like Ron, we've been sort of using ChatGPT for originating content. Again, it's not the finished product. It's sort of the starting point. Our major initiative actually partnership with Sindhu and CogniCor that we started last year is really, using our CRM as sort of the brains of our organization. And again, that's in itself not a new concept. But what that means is again, creating all of our client service workflows in CRM, using AI technology to kind of propel it both in terms of enhanced automation, populating data field as well as driving policies and procedures. So one of the things that we've been doing with each of our workflows is we're taking custodial policies and procedures, loading it into the workflow so that as we're initiating workflows, we're bearing in mind what the custodian requires, right? So eliminates all the iterations with clients. It cuts down on NIGOs, it creates more of an efficient process, some enhanced "if then" logic. And then the other thing we're working on is actually taking all of our custodial data, integrating into our CRM as well, so that at the end of the day, our advisor should spend 80% of their time in CRM working with clients. And to Ron's point, the more data we get into our CRM, the more we can start to automate things like, you know, meeting templates, meeting agendas. I mean, how much time do people spend collating data from different places, copying and pasting into a PowerPoint presentation, to your point, Ric, you know, how much time is spent in that, right? Just creating a meeting prep document, where now with all the data in one place, you use the technology to automate a meeting agenda. Any missing data points we need to capture in the next meeting. Next best action items based on a financial plan and missing data sets or goals or what have you. Again, to your point, Ric, it's about incremental efficiencies that over the course of time just add up and create so much bandwidth back for the advisors to spend with clients.  

Ric Edelman: And ultimately then, what are you hoping to achieve? What's the outcome of the benefit, business benefit or value?  

Vib Arya: Yeah, we just want, to us it's all about where people are spending time. We want everyone to operate at the top of their license. We want our client facing folks to spend time with clients. We want them to throw the servicing, non-client facing servicing aspects to our centralized operations team with the transparency and the information the operations team needs to execute. And we also think of it as a career enhancer, right? Instead of spending time, for our junior associates, let's say, putting together PowerPoint presentations, that's more time they can spend with clients. So it's sort of an aggregate approach to just how we're thinking about our business.  

Ric Edelman: That's interesting you mention PowerPoint, because it is now that tech has gotten to the point where it isn't just word docs anymore. 

Vib Arya: Correct, correct.  

Ric Edelman: You're creating PowerPoints, you're creating audios, videos, photos. 

Vib Arya: Content, content.  

Ric Edelman: In whatever format you need.  

Vib Arya: Whatever you need. Yeah.  

Ric Edelman: Sindhu, give us some use cases that make it easy for advisors to get started with using generative AI.  

Sindhu Joseph: Yeah, let me start with a question. How many people here use AI or gen AI for practice management? 

Ric Edelman: 1, 2, 3, 4, 5 – 2 of them are liars. 

Sindhu Joseph: For your own, personal use. Maybe, maybe more people. Yeah. Okay. Okay. That's better. I think, we call AI and gen AI given the audience, I just wanted to kind of, lay the groundwork. So we call those concepts as anything that a human can, instruct a machine in, natural language. So you instruct somebody to do something and the machine can go and do it, which otherwise need a human intervention. So that's what I call, AI and gen AI, AI is a trained version of that. So if a machine can achieve an intelligent task, that's what we call AI in general. So, I would call the use cases in, maybe in four different categories. One is, and I think, Ron and, we've mentioned some of them. One is in the operational category, how can you increase the operational efficiency. Automating some of the routine tasks, especially in the practice management, I'm sure all of you are using Alexa or Google Home, switch off my kitchen light and things like that. So can you say to your CRM, go and do a beneficiary change for my client, Alex. You can actually do that with the help of AI. So those are the kind of things like, do an RMD distribution, do an account opening. So all of these tasks that needs a lot of processing, which can be automated using AI, using a very simple natural language instruction. So those are the operational efficiency use cases. And some of the ones that Ron mentioned is in the sales and marketing, how can you generate leads, new leads for expanding your client base. So if you have a set of clients that you really focus on, maybe in certain sector, you target, entrepreneurs or doctors, in certain demography, you can actually feed, the AI system this kind of data. And then say, go and find maybe other 10 prospects for me, who are maybe one degree separation from these clients that I have. So AI can actually go and learn the characteristics of your client base and find new prospects for you. So every morning, as you go to your CRM, within a click of a button, if you can say that, okay, give me three new prospects. That would be wonderful, right? So that's something that I can do. It can also help as Ron mentioned in the marketing side, creating brochures because, gen AI, one of the main things that, the capability is generating new text. So, you can actually get a lot of brochure, marketing material, emails and things like that. Of course, it would greatly benefit if the data of your customer is there, embedded in it, but otherwise also it would give you a head start. So the third use cases on the compliance side, how can you stay ahead of compliance? Starting with proactively or asking questions like, how can I do certain things like, what is the process around it? When do I send a form CRS? So those kinds of compliance questions you can ask. And if an AI is trained on, let's say, wealth management specific, area like, FINRA documents, SEC, IRS, those kinds of things. You can ask these questions and make sure you get a very informed answer on that. And this can also come, proactively, based on how you set up the AI. When you are doing certain trade instruction, it can actually tell you that you are doing it the wrong way, or you are supposed to do in certain things. So it can proactively instruct you. So those are the compliance, use cases and the final use case, which is something that I, get very excited is on the personalization. So far it was all more, how can you make life easy for advisors? But on the personalization side, is you pride yourself in terms of understanding your customer and AI can really do that at scale. So if you want to have the pulse of your client at your fingertips, AI can actually help you with that. In, maybe going through your emails, all of the email communications, call transcripts, meeting notes, all of those things. And even the portfolio performance, you can actually understand  whether what's the name of the pet for my client so you can actually get that information in one single query. So that's kind of the beauty of AI. You can do massive personalization and scale your business.  

Ric Edelman: I think that's kind of the crux of the issue. And I think a fundamental fear that advisors have. First on the superficial level, is AI going to eliminate the deep relationship that I have with my clients? I'm fearful of that, that if you're going to do all this automation, et cetera, you've turned my practice into an antiseptic environment and we're all about relationships and this is going to undermine that. I want you to address that question, but I also go beyond that to a deeper level that, I can't tell you how many times I've been embarrassed by my wife, who, and the planners who've worked with me over the years have all experienced this with me and Jean; a planner will come up to me or a client or a friend saying, oh, thank you so much for that wonderful gift you gave me. And I'm like, the hell are you talking about? And Jean had sent them something and I had no clue. And so if AI is gonna go into your data because it's got all of the stuff and it's gonna send a note to your client, celebrating your dog Muffy, I'm like, next time I see you, I'm like, I don't know, you have a fricking dog. So is there a risk here that on the one hand, the deep relationships is gone because AI is replacing it. But on the other hand, AI's got the relationship with my client now, not me. So is this something we really need to be worried about?  And how do we overcome this concern?  

Sindhu Joseph: I think probably you have phrased it the wrong way, I would say. So how many of you have watched the movie, Devil Wears Prada? Okay. So in, in that movie, Meryl Streep, has two personal assistants. They go through every single file that she has, and she's very, very kind of strict about it. And when she goes to an event you meet your, advisors or clients, they are on both the sides and they are whispering in her ear, this person is that, and he has this relationship and all of those things. So you can imagine AI as this whisperer, who knows intimately, everything about your client. And telling you in context while, just before you're going into that meeting within a few seconds, you are up to date, what's the name of the client?  

Ric Edelman: So I want AI not just to communicate with my client. I want it to talk to me before my client meeting.  

Sindhu Joseph: Exactly. Yeah, so it's not, talking to you without your permission. I think that's one of the things that we have to be aware of or consciously implement human in the loop. So the advisor has to be in the loop, but how can an advisor keep track of maybe 150 clients that they have and all of their personal, matters, whether their kids are going to college, whether they achieve something great in there? So all of these things AI can keep track of and whisper in your ear, just before that, within that context of the client. 

Ric Edelman: So Ron put this into context for us, the concern I have and Sindhu's solution for it. As you've talked with advisors about first using AI, what are their reactions, skepticism? 

Ron Bullis: I think most advisors and I put myself in this category, like shiny objects, a new technology, is shiny objects. And so we go out there and we put a shiny object in our practice, and then we wake up five years later, and we have 20 different pieces of software, and they're all touching a client in a different way or touching a process in a different way. So mostly advisors that I've interacted with are really excited about AI. Actually haven't gotten the sense from that they think AI is going to put him out of business. I think they kind of feel like, well, the robo's didn't put me out of business.  

Vib Arya: Yeah.  

Ron Bullis: So AI is not going to put me out of business. I think a mistake that I see happening is rushing. I don't disagree with anything Sindhu said about getting to where you could have deep personalization across an organization. But what I can see right now is even if, ChatGPT could deliver a summary to our advisor of all the meeting notes, let's say before the meeting. That's great. But if the advisor's data still on that client is surface level and or if what the AI engine thought was important wasn't actually important. You might still miss. So, I'm not trying to use AI in my firm right now to deeply personalize communications or to deeply personalize, like, I don't care if they've got a dog named Muffy. I don't. And I would actually argue that some of my best clients, I actually don't serve clients anymore because I stepped out of that two years ago, but I would argue that our best clients in our firm when they talk to us, they want to know that we're helping them make wise decisions with their money. They really enjoy the fact that we have personalized relationships with them. But at the end of the day, if you was to ask them, which would you rather have me be your best friend that knows everything about your kids and where they go to school and whether they're allergic to food and what their dog's name is, or would you rather have me helping you make the best tax decisions, money decisions, avoid losses, things like this? They're going to say that one all day long. That's your job. That's your JOB. So when we've been looking at it and we're early in testing this, I would say, figuring out where there is the biggest block of time and lift that you could get from something like this. If you're at the firm owner level, or running a team, I would be focusing on things that you could standardize. Like your investment strategy documents, or a client deliverable. Because you can raise the level of the deliverable with very little lift, you can make sure there's no spelling errors. You can make sure there's no grammatical errors. You can make sure that every client gets an amazing investment strategy document as an example, right? So we've been actually focusing back from like even just letting the advisors use this to saying what are the things that we could do for the advisor? Like the advisor is not even involved. What if we actually deliver to the client summaries of their investment performance with context and copy that is infused with our firm's language and philosophy so an advisor doesn't describe it wrong, So, we've been thinking about this more from, how do we actually take things completely off the advisor's plate? I think that there is a space to eventually get to where, an AI powered assistant would be probably better than a human assistant because you could just give it a bunch of verbal commands like I need a flight, I need a hotel I need notes on this client blah blah blah blah blah. And it's processing all of them and delivering back as fast as you could still consume it as a human though It's gonna be the limitation. So when I think about AI scaling inside of an organization and creating value and whether it's a small practice, a large team, your own RIA, one, document all the steps in your process, right? Which is boring and nobody likes to do. But if you put AI into your practice and you don't actually have a clear client experience road map or a bunch of your processes well documented, it's gonna be completely useless anyway.  

Ric Edelman: You mentioned, distributing or creating documents that have the firm's personality, the firm's culture. What about the advisors' style? Because the individual advisers within the firm have their own way of communicating their own style.  

Ron Bullis: It's a layer. If anybody wants to see this at the break, I'm happy to show you. The guys on my team that built this for me, had a little joke, that my alter ego is James Bond. And, so our AI engine writes everything as if it's, as if I'm James Bond, and it doesn't ever leave the firm, right? So I'm a tester. But all of our advisors have their bios and if they've created any content. So if they have shown that they have a distinct way of writing, communicating personality, it's already consumed all of that too. And so it's very easy to say it's part of the prompt. So it's already built behind the scenes. So if, this advisor is writing something. Their bio, their LinkedIn, all their stuff like that's easy, but we can put their twists on that stuff. But the important level philosophy, methodologies, things like that, we make sure those air just nailed,  

Ric Edelman: Vib, what are your suggestions for how advisors can get started? 

Vib Arya: Yeah, I think the beauty of AI is we don't have to compromise on any of this stuff. I think it really is going back to being intentional about the experience you want to deliver, where you want to spend your time. And also recognizing that advisors, it's still a very human conversation with clients. And you want to continuously demonstrate value. And as I think Sindhu said, personalization at scale, right? We hear those buzzwords, but what does that mean? Ric using your example of, how AI can work to your benefit, Ric and Jean come to our office. Ric likes his coffee black. Jean likes tea. When you come in, we hand you that beverage, right? If we build that into our CRM as data points, as part of our meeting prep, we use AI technology and we can just create that experience for you, right? To your point around AI creating a little bit of personalization without you even asking, Ric here's your coffee. I know you like it black. Jean, here's your tea. Again, using, Ron's points around some of the data sets, you can have, risk tolerance and financial planning goals and obviously all the financial data. You can sit down with the client armed with all the data, but still have a very empathetic conversation. An older couple who's spent their whole life saving. They've been conservative. You can say to them, look, we have your data all here. You could probably splurge a little bit now in your 60s and maybe fly first class when you've spent your whole life sort of sitting back in coach, right? By having the data automated, you're armed with, again, the personalization at scale to then have those empathetic conversations, deepen relationships, again, handing a beverage when the client walks in, all systematized. And again, it really comes down to the discipline of how you maintain the data. Otherwise, all automation does is make garbage come out faster, right? So it really comes down to just sort of adopting that intentional mindset of how you want to use the technology, and I don't think you need to compromise. 

Ric Edelman: So it sounds that, much of this you're referring to, Ron, you and Vib both, highlighted this, that it's really a productivity tool. You're going to be able to produce stuff faster and better. Great. The advisor's not paid by the hour. Their firms don't really care if they spend an hour issuing an email to a client versus five minutes issuing an email to the client. So where's the ROI for the firm and for the advisor? The fact that it's more efficient, so what? How does it generate revenue for the firm? How do I increase clients and assets with this tech?  

Ron Bullis: Interesting perspective I have on this because we've been building our own software run our RIA now for three years. And it's easy for me when I'm paying my software engineers and we're building something to see my firm level ROI on efficiency. But it's been very fascinating to watch how advisors use that. If it takes three minutes to open an investment account in our system, which is what it does like, okay. That's 57 minutes of your life you have back from using a traditional custodian of DocuSign and work. What do you do with it? Well, some of them, actually just spend more time with their families and doing what they want. They basically get to make the same money and they spend less time on the input side. Some of them are like, I want to grow and I'm going to grow rapidly and I'm actually going to go to market now at a slightly lower price because I'm more profitable on a unit economic basis. So unless you're a growth focused advisor. Or you're already at capacity and you're like, I have new clients coming in and we have no availability to do anything. In fact, this might be a great point. If you start thinking about this technology from a productivity and efficiency standpoint, the conversations about there's not enough talent in our space. This isn't going to fix that fully, right? But if you could say, I'm going to help my advisors or I myself as an advisor are going to try and become 25% or 30% more efficient in how I do these standardized daily tasks using this tool.  

Ric Edelman: It's a long play. It's going to be an indirect benefit no matter what. So anybody who's going to argue that you're going to see an immediate and direct ROI on this is simply not getting it.  

Ron Bullis: Yeah, I mean, we haven't, and we've been running it since September, and we're a small firm of 30 people, and the average age of our advisors is 36, and we're very tech forward. And I would say we haven't seen any ROI on it yet. But we know what it's going to be capable of. We've already early kind of tested advisors' reactions. It's still anecdotal, but I can see a path where in a couple of years, our efficiency is maybe 2x actually what it is now, just from standardizing, client investment strategy documents. Sindhu mentioned a whole bunch of things like the downside to this is you could spend a week just writing down all the possible use cases and places that you could deploy something like this inside of your firm. So I think it really is what is the thing that you need the most and where can you get the most lift? And then it's going to take, it might take a couple of years to really start seeing massive ROI, but everybody in here would probably agree this is not a sprint business. This is a marathon business. And so if we start thinking in terms of one of my clients going to need from me as the leader of the firm or their advisor five years from now and 10 years from now, it changes the perspective.  

Ric Edelman: So that would argue that this is going to be a new level of workload on top of my other work to get this to where I need it to be. So I'm going to be writing the emails the way I used to write them while I'm doing this other thing so that in the future, I don't have to write those emails. 

Ron Bullis: I don't disagree.  

Ric Edelman: So you're going to go backward to go forward.  

Sindhu Joseph: I like to push back a little bit here. One is when, advisors are spending time with family, I think it's a great, achievement, great outcome. So we should be able to spend more time with our families. So, from a productivity perspective, I think, if that is happening, that's wonderful. But, it's not just a productivity tool. I think advisors would deliver better decisions, better investment advice with AI. It is erroneous for us to think this as just a productivity tool. When you have all the data, when you have all the specific situations of a household, you are able to take better decisions for them, better investment decisions for them. And I think we should look at it as a tool from that perspective. And the third one is you mentioned we cannot scale. And massively because advisors themselves, they don't want to scale in many cases. But I think there is also 70% of the household in the US is still, don't have a financial advisor and, AI will go a long way in terms of democratizing the access to wealth. So I believe that this is something that we should all think of from that perspective. Like a lot more people can. A college grad yesterday, we were talking about, interning a lot of new people into financial advisors. So people can come into this profession much more easily using AI because, there are a lot of things that is taken care for them using AI, you don't need to have a core financial degree to be able to do this profession.  

Ric Edelman: I'm glad you're pushing back because what I'm trying to do is come up with all the excuses and arguments that firms and advisors use for resisting the embracement of this. And it's like advisors who are arguing, I want to keep using my HP 12C instead of Excel. And, Excel takes a while to learn and deal with, and I'd rather just keep using my calculator. And so that just isn't going to cut it, is it? But who are the vendors? Robbie, you said that you've been building this in your firm for years. I'm not sure a lot of folks have the ability or desire to build. And now, these days, there are a lot of vendors out there. Sindhu, talk about that. Where do advisors and firms go? In fact, describe your firm a little bit, because I don't think everybody's familiar with what you're doing.  

Sindhu Joseph: I run a firm called CogniCor. So we are an AI co pilot designed for financial advisors and designed for the wealth industry. So look at the space of Gen AI, like you can go to OpenAI, which is providing the ChatGPT platform or you can go to Microsoft or Salesforce. Salesforce has Einstein as a assistant and Microsoft has CoPilot so these are some of the very broad offerings that is in the market. Our differentiation in CogniCor is that we are designed for the wealth industry and specifically for financial advisors. One of the things Ron you mentioned is there is a two year period of deployment before you even get to see any ROI. I think if you go with firms like ours, for example, in one of the use cases that we do is, the meeting assistant, which, basically is sitting on top of your CRM, any CRM that you use, Salesforce, RedTail, Wealthbox, Tamarack, Dynamics, any of those CRMs. This assistant comes up automatically and then, looks into your CRM and finds out which are the clients that you need to meet and then schedules that meeting, connecting with Calendly and, reach out to the client automatically if you want to. And then, sets up that meeting, prepares the agenda for them, by looking at previous meeting notes, previous agenda, and then sits in the meeting, takes notes and then convert them into action items, map them to task in your CRM and kickstart that workflow. So all of this are available today and it is not something that, you need to sit and implement. It is a plug and play experience. So today if you are using any of these CRMs, this is available to you as a module that is, deployable today. Again, one of the other things on personalization. So we have a product called Client IQ. So we just, sit in your CRM again, reads all of the, meeting notes, all of the client communications, emails, call transcripts, your clients’ portfolio information, all of those for the past three years. And any question that you ask on the client, it is able to respond. Again, it is one click deployment process. So, some of these modules are already out there in the market. I think, when you choose a vendor, what you should probably be looking at is, as, Ron and Vib has been mentioning, where is the data? Where is my client data going? Whether I have a very specific instance on the cloud, which, protects my data and does not go in to train that AI algorithms. So that is one thing that you should really focus on. The second is whether this satisfies my requirement or, is it a very generic AI that does not understand as a financial advisor. These are some of the use cases that I want to deploy. Is it fine tuned for that? With that, that's some of the things that we focus on.  

Ric Edelman: So that, does anybody object to that scenario that Sindhu just described? That sounds like a pretty cool way to operate a practice. Is this the end game? What's next? Where are we going following this? What gets you excited, Vib, about where all this is going? 

Vib Arya: It's counterintuitive to say, but at the end of the day, and no one knows this better than you, Ric, this is a very empathetic human business. It's about relationships. And so we are constantly focusing on two tenants, cultivating that human experience, using data, using technology. And really just making sure people understand the value of time and where they spend time. Again, the more you can do in terms of talking to clients, meeting with clients, and you can start to measure some of those things with, hey, did this meeting bring in an increase in wallet share, right? There's quantifiable ways with data to measure effectiveness. Can I use that time to go spend more time on the ski slopes, that I'm passionate about and help cultivate business and use it as business development opportunities? Can I use that time to go meet with more COIs, right? State attorneys or whatever it may be. And so I think everything's quantifiable, but it's really focused on, again, that disciplined approach to the human advisor client relationship, to the notion of operating at the top of your license, the notion of really creating career pathing, right? Again, for people getting bogged down, copying and pasting data into certain data sets. To have it all automated and get some of your junior folks into client meetings, right? To cultivate their careers, to cultivate next generation connectivity. Ric, we're just scratching the surface here. And it's just so exciting about the possibilities. But I do think it comes back to, as Sindhu said, the discipline around the use cases, the discipline around the experience both internally and then outwardly, the experience you want to convey and then how do we harness all this. 

Ric Edelman: Everything we've been describing has been relating to the client relationship, the financial planning environment. What about the investment management side? Ron, do you see this impacting investment recommendations and portfolio management?  

Ron Bullis: Yeah, I think that's, anything where there's a large amount of data to consume, and to filter, and to bring back to a person who's making a decision, or an algorithm that's making the decision, I think is a great use case for this. Some of the early products that are out there right now are not connected to the market in terms of, real time data. So there are some, limitations there, like early ChatGPT. You also have date limits on what it actually knew, so those things are being mitigated and jump past. I'm sure, Sindhu's firm is feeding it real time information and other spaces. So I think that's one. I think the other one that's, we've got a lot of lift out of already. And when I say ROI has a longer-term payback, it isn't because I can't see the like time savings immediately. It's the fact that getting an advisor, and I'm not saying this negatively about any advisor, but as an advisor then takes that time and makes decisions about what to do with it, it might take them three months, six months, nine months or a year to build new clients or to grow their practice with this efficiency, right? So there can be a fairly rapid payback in time. But I think at the firm owner level, when I look at this, I'm like, this is a couple of years of me. Investing quite heavily into it. Or go out there and license somebody else's software and move , faster. But I think, an area that is a really interesting one, and Sindhu mentioned this, is compliance. So we built a simple, I shouldn't say we, I always say we, as if I can code my team, not me, built a simple Google form. We're now in any of our advisor wants to publish a social media post, a podcast, make a short video, whatever they want to do. Instead of it going to a human on our team, which happens to be my co-founder, and he hates being the CCO but we drew short straws and he got that one. It goes in and it gets summarized first through our ChatGPT engine through our AI engine and it has access. We haven't fed it all of SEC regs and things like this, but we've trained it with our compliance manual, different industry regs, things like this, and it writes a short summary and it gives it basically it's green. It's good to go and it doesn't need eyes. And if it has any other things in it and it, thinks it needs eyes and it writes a summary, shoots it off to the CCO and is like, hey, you should look at this. That probably saves him 50% to 70% of the time. Just reviewing very base level things where somebody is I want to just say it's important to have an estate plan. Well, that would have been 10 minutes of his disruption from whatever he was doing that's a high value task to spend 30 seconds looking at that post to then write a note and to our compliant system to document that it was approved and then ship it back to the advisor. Now it's seconds. So I would say that anything that has a large data set or again, anything that's going to have a lot of human involvement, I would start looking at those spaces and be like, that's a great place to start. I think at the end of the day, is this mandatory that advisors embrace? And if so, when? How much longer can advisors and firms go before adoption of this technology? We know enough, 10 years from now, everyone's going to have it, but, and it will no longer be an advantage in practice management. It'll be table stakes, but how much longer can advisors go? Who are not engaging at all. Vib what would you say? 

Vib Arya: It's all relative. The analogy I'll use is, again, do firms want to continue to be stock pickers and do active investment management or do they want to switch to more models or rebalancing? I think it's a preference. It's a matter of where people feel they add value with their time. I think it really just comes down to where do you want to spend your time? Where do you feel your time is spent that adds the most value for your clients and also gives you as a professional the most fulfillment. So I think it's hard to generically answer, Ric. I think it really just comes down to at least having that honest conversation around where you want to spend your time and where you add value.  

Ric Edelman: Sindhu, what would you say?  

Sindhu Joseph: I would say it's not if it's when. And, to answer the question, when it was yesterday. 

Ric Edelman: I guess it's not a surprise you would say that. 

Ron Bullis: I was going to say the same thing I was going to say yesterday. So you stole it. 

Ric Edelman: But they say that, the average age of advisors is 60+, they're going to be in this business only another decade or so before they retire. Can they get away with it? Can they say, oh, the heck with it? I'm just going to keep doing what I've been doing.  

Ron Bullis: Yeah, it'll go the way of Blockbuster. It'll be a slow grind down to zero and then gone.  

Ric Edelman: But if you have any hopes or plans of longevity in this business, if you want to train younger people, recruit younger people, create a succession program, you really need to be building a platform that they are going to be able to succeed with. They're not going to be able to breach success building a business the way you did it. They're going to have to do it the way the technology is demanding. And so if you're not going to want to do it, you need to create an environment that allows them to do it.  

Sindhu Joseph: I just want to put this in perspective with respect to all of the other industries. We have, as wealth managers and the industry itself, we have gone or come a long way, in following our traditional approach. While other industries and businesses have leap forward in terms of how they do business. Will anyone accept from Amazon today within a click, you are getting your package at your doorstep within a couple of hours, imagine the kind of experience and behind the scenes, efficiencies, end to end efficiencies, these industries have built to deliver that package in your doorstep within a few hours. 

Sindhu Joseph: So, we, that's what the young people are used to, order an Uber cab like it's, immense efficiencies and experience. While we are demanding such kind of experience and efficiencies from all other industries, from wealth, something that is so fundamental to every human existence, we are still okay with sending these paper forms, getting it signed, as you were mentioning yesterday, in FedEx package. So those are, these are two worlds and, at some point, and I think this is some kind of a historic opportunity for the wealth industry to innovate, especially when there is this massive transfer of wealth that is happening. And if we don't innovate and capture this moment, I think it would slip away from us. 

Ric Edelman: That's a great way to end this panel. It's a great comment there. So say thanks to Vib and Sindhu and Ron for our conversation. 

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Ric Edelman: On Monday's show, the newest example of how AI is going to put you out of work. 

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Links from today’s show: 

Become Certified in Blockchain and Digital Assets: https://dacfp.com/certification/   

Ask Ric: https://www.thetayf.com/pages/ask-ric 

Wealth Management Convergence (March 2024): https://www.thetayf.com/pages/convergence  

The Hypocrisy of Jamie Dimon and the Democrats’ About-Face on Crypto (6/20/24 Episode): https://www.thetayf.com/blogs/this-weeks-stories/the-hypocrisy-of-jamie-dimon-and-the-democrats-about-face-on-crypto  

Shufro Rose: https://www.shufrorose.com/  

Lifeworks Advisors: https://lifeworksadvisors.com/  

CogniCor: https://www.cognicor.com/  

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