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Waiting for AI’s watershed moment: Q&A with Benjamin CEO Matt Reiner

SAN DIEGO — If AI is so useful to financial advisors, why aren’t we seeing more adoption?

Although most agree that artificial intelligence has the power to upend the wealth management industry, there’s a perception that it’s still waiting for its big breakthrough, says Matt Reiner, CEO of Benjamin, a digital personal assistant for financial advisors.

Based in the cloud, AI assistants sync to a handful of advisor-facing technologies like CRM, portfolio management systems and scheduling apps, as well as aggregate data used by advisors to service their clients.

Reiner says AI’s tipping point may be happening in front of our eyes — but we’re just not seeing it. See what else has to say about technology adoption, the challenges for independent advisors and the future of AI.

Matt Reimer headshot IAG Benjamin
When will AI have a watershed moment?
Companies are actually starting to show the real-life impact of artificial intelligence. Not necessarily the behind-the-scenes applications like trading, where AI has already been utilized heavily for a long time, but to see it come out to the forefront. That's a very gradual process. It's like the idea of self-driving cars. At first, people thought that's never going to make it. It's too crazy. But, people were just introducing the idea. Now, people are actually driving self- driving cars.

In the future we'll all look back and say, that period of time was the watershed moment for AI. I don't know if you're ever going to be able to point to the actual one event. This period of time, over the next five to 10 years as people continue to talk about AI and start getting a better grasp of what it means to them and the ROI for their firms and the value to their clients, it will come into view.
Where are advisors using AI right now?
One area is to help with scheduling. When a system sees that a meeting has been scheduled, the technology can pick up all the reports and relevant data that advisors will need to review prior to the meeting. That can be performance and portfolio analysis to help eliminate some of that data aggregation that goes into preparing for a meeting. After the meeting, AI systems can go and get the notes from the advisor and actually put them into the CRM. So, the technology has come a long way.

Another scenario is if a client is depositing a large check or if dividends are building up in the account. The administrator or the advisor has to continuously monitor that situation and make sure the excess money is being managed advantageously. People had to work. Now AI can see that that money's built up. It can reach out to the client to find out how the client wants to deal with the money. Coordinate with the advisor. And, get that money invested.

So, AI is effectively doing multiple things. It’s enhancing the client experience. It’s mitigating risk of the relationship. Lastly, it’s giving back time to the advisor and their team. And that’s a critical part of the equation. Because if you look at those scenarios and play it out to 75 or 100 clients, it turns into a lot of time saved.
What’s holding back adoption?
For one, it’s interconnectivity. We've been a very slow as an industry to create open architecture. Schwab and Fidelity are just beginning and TD Ameritrade was a little bit ahead of them in opening up APIs to allow companies to integrate with their technology. You still have antiquated technologies that are high costs of change.
Will technology help bring down fees for clients?
Fee compression isn’t a real challenge. Actually, advisors are going to be able to continue to chart the same assets under management fees they have been for years. The challenge is that clients are going to require them to provide more value-add services for that fee. There is going to be increased pressure on expenses. The challenge really becomes margin compression.

Advisors may fall into the trap of a fee war. If advisors focus on fees, they're going to miss the boat. Lowering fees is just masking an inadequacy to convey their value proposition to clients. Because firms that maintain fees are able to show what the value proposition is, which has become increasingly critical for advisors going forward. A major challenge for advisors will be keeping in line with pricing.
What is the biggest danger for independent advisors?
Firms are going to start separating themselves from the pack. RIAs aren’t going to necessarily be competing against wirehouses and robo advisors, but they're just going to be competing against better RIAs. Just because of their sheer scale and efficiency and the investments that some RIAs have already made in technology early on. It’s impossible for many RIAs to already keep up.

The real threat for RIAs is sitting and waiting.