The Latest In Financial #AdvisorTech (April 2024)

Rising Costs Of Inflation (And PE Owners Protecting Margins?) Spark Wave Of AdvisorTech Price Increases From Orion And InvestCloud… And Risk Disruption From Advyzon?

Technology is a fundamentally deflationary force. It simplifies and automates, allowing teams to get more done with reduced effort in less time. Consequently, while it does have a cost (for the technology itself), the fact that software typically costs far less than the human staff labor it replaces and augments still results in lower costs to get stuff done. The end result of which is a rise in productivity, which writ large across the entire economy increases our real (inflation-adjusted) standard of living.

The ironic caveat, though, is that while technology tends to be deflationary, the cost of technology tools themselves often don’t reflect those same decreases in cost. Instead, they try to ‘value-add’ their way up to provide more, for the price they already charge. Thus why televisions today are radically more capable and of far higher quality than they were in the past… but the actual amount of cash you spend to buy one isn’t substantively lower than the past (it’s still a multi-hundred-dollar purchase). And the same is true of other hardware (e.g., computers and smartphones), as well as software services (from Microsoft Office to Netflix).

In practice, this effect usually derives from the reality that once a company has successfully convinced consumers to pay a certain amount for their product or (software) service, its motivation as technology gets more efficient and their costs get lower is not to cut their prices, but instead to value-add their way up to defend the prices they already charge (that they’ve already validated consumers are willing to pay).

The caveat, though, is that as companies value-add their way up to defend their prices, they create organizations that have an expanded breadth of staff and other input costs across an ever-wider range of offerings… which inherently makes the company less nimble and able to adapt to the risk that some of its own costs might actually go up (e.g., due to inflation) instead of going down (due to its own technology cost efficiencies).

All of which helps to explain why this month, both Orion and then InvestCloud announced ‘unexpected’ price increases, of 8.9% and 5% respectively, that will apply immediately to a broad swath of their advisor customers, even and including many who were not already in the midst of a contract renewal cycle. Which in turn rides on the coattails of a similar broad-based price increase in Redtail’s CRM software last year.

From the advisor perspective, fee increases on software are frustrating, especially on “core” technology like portfolio management software (which is already typically the most expensive part of the advisor’s tech stack), but are not exactly budget-busting for the typical advisory firm; for a typical advisory firm spending 5% of its revenue on technology, a 5% to 10% price increase in all of their technology amounts to 0.25% to 0.5% of revenue, and advisory firms on the AUM model can see their profitability fluctuate by more than that in a week’s (or sometimes a single day’s) worth of market volatility, and comes on the back of a very strong market return in 2023 that puts most advisory firms at recent highs in profitability. Which is likely a factor in why AdvisorTech vendors are raising their fees now; they know that ultimately, most advisory firms can handle the price increase with little actual business impact.

From the broader industry perspective, though, changes in pricing are more impactful because they change the relative pricing of competitors in the marketplace, which can either reduce a price advantage relative to a competitor (making it harder to win market share), or open up a price advantage to a competitor (who begins to win more market share as they find themselves representing a better relative ‘deal’ than they did previously). Thus why Wealthbox CRM likely experienced an uptick in inquiries after Redtail’s price increase (which for mid-sized firms, moved Redtail from being a discount competitor to being in-line with Wealthbox’s pricing so they could compete on more equal footing), and why lower-cost portfolio management competitors like Panoramix and Advyzon will likely see more inquiries and rising market share.

In the long run, though, even today’s low-cost competitors are likely to rise in price at some point, as technology companies often enter new markets as low-cost competitors, and then as improved capabilities are substantiated with rising market share, raise their fees based on the quality of what they’ve built (a story that has played out in recent years with vendors like RightCapital and Kwanti), and ultimately raise and further ‘optimize’ their pricing as eventually PE investors get involved in an effort to fully maximize enterprise value. Which means as the AdvisorTech market matures for financial advisors, with a steadier cycle of innovative new entrants that displace incumbents over time, the phenomenon of software price increases is likely here to stay – for which advisory firms will have to decide whether the capabilities they get are worth the price they pay, or whether the hassle and switching costs are worth the pain it takes to switch over to the next low-cost competitor.

Orion Launches Estate Planning Tool As More Firms Focus On "The Generational Wealth Transfer" Opportunity, But Will It Actually Help?

Bank robber Willie Sutton was once asked by a reporter why he stole from banks, to which Willie infamously replied “Because that’s where the money is”. Which similarly helps to explain why, over the past 20 years, the financial advisor industry has increasingly become focused on retirees (especially as the industry has pivoted more and more to the AUM model): because that’s where the money is. In fact, recent Federal Reserve data shows that nearly 3/4ths of the more-than-$33 trillion in equities and mutual fund wealth is now held by Baby Boomers and their Silent Generation parents who are still alive (i.e., those aged 60+, who are almost all retired now), and advisory firms have adjusted their (now-retiree-centric) services accordingly.

The caveat, though, is that retirees don’t stay retired forever; at some point, they sadly pass away, and any remaining assets (which in practice, are often substantial, because most retirees don’t want to risk early depletion, and therefore end up with money left over) pass to the next generation. Which is why industry researcher Cerulli collectively estimates that there will be tens of trillions of assets that change hands over the next 25 years, in what has been dubbed “The Great Wealth Transfer”.

While some view the Great Wealth Transfer as a great opportunity, for advisory firms that already manage the portfolios of retirees, this largely represents a Wealth Transfer Threat, especially given that Cerulli’s research also indicates that more than 4-of-5 inheritors anticpate looking for a new financial advisor after they inherit their parents’ wealth. Which has created a growing pressure on advisory firms to figure out how to connect with the prospective next generation heirs of their clients now, in the hopes of building a relationship they can preserve when the wealth transfer event happens.

And when it comes to working with higher net worth families – where the bulk of those assets are in the first place – one of the most straightforward ways to build relationships with those prospective inheritors of wealth is to help advise clients on the wealth transfer itself. In other words, to engage both the senior and next generations collectively in a family estate planning process, both to deepen the relationship with those who hold the assets now, and establish a relationship with those who will inherit it in the future (all in a converation focused around the estate planning implications of the wealth transfer itself).

In this vein, it makes sense that portfolio management software (and outsourced investment management provider) Orion announced this month the launch of a new estate planning tool to help advisors model and visualize their clients’ estate plans, as an extension of its existing Orion Planning solution. Specifically, the new Orion Estate tool offers a series of workflows to collect relevant estate information as advisors review their clients’ estate documents, will create flowcharts to show where assets will flow at death, model “What-If” scenarios to see the impact of various estate planning strategies, and provide quantative tables for more analytical clients to see where and how dollars are flowing at each step along the way.

From the advisor perspective, though, it’s not clear how much adoption Orion Estate is really likely to get. Kitces Research on Advisor Technology shows Orion Planning has low-single-digit adoption as a primary planning software (less than 1/10 the market share of each of its leading competitors eMoney, MoneyGuide, and RightCapital). And amongst those that use the software, Orion Planning scores well-above-average for Simplicity, but lowest amongst any of the major planning software competitors for comprehensiveness and depth of analysis… which implies that Orion Planning is currently used by the least-planning-centric advisory firms. Who are also the least likely to delve deeper into estate planning conversations with ther clients (because, again, they’re not very planning-centric in the first place). Whereas the more planning oriented firms are likely using other financial planning software solutions… each of which already have their own estate planning capabilities (such that their users still wouldn’t necessarily need Orion Estate). In other words, Orion Estate as an extension of its Planning tools appears to be a potential mismatch relative to the advisor personas who choose to use Orion’s Planning tools in the first place.

In context of the broader industry, Orion’s foray into estate planning tools also highlights a broader split emerging between advisors that do “high-end” estate planning and need to model more sophisticated estate planning strategies like GRATs, CRUTs, and IDGTs (where solutions like Vanilla, Luminary, and the recent EstateView are on the rise), and estate planning for the mass affluent and ‘mere millionaires’ who don’t have an estate tax problem but do need basic estate documents (where solutions like EncorEstate, Trust & Will, and Wealth.com are emerging). Which is already putting a squeeze on the utilization of estate planning capabilities within financial planning software (which generally covers the core modeling of estate outcomes as part of the comprehensive financial plan, but typically lacks the document preparation or advanced-estate-tax capabilities of the more specialized competitors that have emerged).

From the perspective of the Great Wealth Transfer, though, arguably the biggest question is simply whether a financial advisor who gets introduced to future heirs through the estate planning process can actually deliver enough value to, and deliver enough of a relationship with, their clients’ heirs to actually be able to retain the relationship after the wealth transfer occurs. As ultimately, a retiree-centric firm that seeks to build relationship with their retirees’ next generation heirs is still, in the end, a retiree-centric firm that has the same generational gap in its services to those heirs. Or stated more simply, perhaps the real key to retaining next-generation heirs isn’t about expanding estate planning services to their parents, but evolving the service model and advice capabilities of the firm to be more relevant to that generation of clients in the first place (and in that case, the firm will get more next-generation clients than ‘just’ their retirees’ heirs anyway)?

Vanilla Launches Scenarios Visualizer To Illustrate The Value Of Advanced Estate Planning Strategies For The (Few) Clients Still Impacted By Sizable Federal Estate Taxes

For as long as financial planning has existed, estate planning has been a key component to plan for. To some extent, this is simply because planning for what happens to your wealth after you pass away – how it might impact heirs, and the orderly (or not so orderly) disposition of assets themselves – is something worth planning for. And in part, estate planning was a part of financial planning because in the 1970s, 1980s, and 1990s, estate tax exemptions were so low that any young couple who had a reasonable amount of term insurance to protect their children would have an “estate tax problem” that at least necessitated the use of an Irrevocable Life Insurance Trust (ILIT) to shelter the insurance death benefit.

Since 2001, and President Bush’s Economic Growth and Tax Relief Reconciliation Act – which set the Federal estate tax exemption on a journey from what was then $675,000 to culminate in a $3.5M exemption by the end of that decade – the scope of the estate tax has narrowed. Which extended further under President Obama, who further lifted the estate tax exemption to $5M and then $10M, subsequently indexed for inflation, and then further expanded with portability of the exemption for couples to a surviving spouse. Such that the number of households subject to the Federal estate tax have fallen by nearly 98% in the two decades since.

Nonetheless, while estate planning – or at least estate tax planning – is narrower than it’s ever been, it’s as relevant as ever to those who net worth is actually high enough to trigger a Federal estate tax. In fact, almost by definition of the size of estates it applies to, anyone actually exposed to Federal estate tax will quickly have a 7-figure, and likely an 8-figure, estate tax exposure!

Fortunately, over the years attorneys have developed estate planning techniques that can help reduce this estate tax exposure, through a bevy of 4-letter-acronym’ed tactics like GRATs, SLATs, CRUTs, and ILITs. However, most of these tactics don’t vanish estate tax exposure immediately; instead, they often generate estate tax savings through “freezing” and “shifting” techniques that only materialize over time. Which means advisors need tools that (accurately) illustrate how wealth transitions and estate tax savings are generated in a proposed scenario as the years go by, versus what would have otherwise happened with the client’s status quo situation.

Which is why this month, estate planning software provider Vanilla launched Scenarios, built to illustrate how those various 4-letter estate planning strategies can be applied to a client’s existing estate plan, and show how the prospective estate tax savings will add up in various hypothetical futures (e.g., fast growth versus slow growth, TCJA sunset versus not, etc.).

From the advisor perspective, Vanilla’s scenarios will be nice for those advisors who really need to be able to illustrate these kinds of complex estate planning scenarios. For advisors that specialize in serving ultra-HNW clientele, the choices up to this point have been relatively limited, and dominated by spreadsheet-intensive (not very client friendly) alternatives like Leimberg’s NumberCruncher, where Vanilla may quickly become a core alternative. For advisors who mostly work with mass affluent and “mere millionaires”, but have a handful of ultra-HNW clients (for whom estate planning modules in traditional planning software just isn’t enough, and does not cover the various four-letter estate planning vehicles), Vanilla may also appealing (as retaining even just one big client can make the cost of software worthwhile).

From the broader industry perpsective, though, the big question about tools like Vanilla (and juxtaposed with other recent new-entrant competitors like Luminary and EstateView), is just how sizable the market opportunity really is. Spectrem Research estimates that there are only about 250,000 households in total in the US with more than $25M in net worth (where Federal estate tax exposure kicks in for a married couple). If the average ultra-HNW advisor has 25 such clients, the whole market for high-end estate planning software might only be 10,000 advisors. Which makes Vanilla very relevant for a small segment of advisors, but unclear how much adoption and momentum there will be for the ‘mainstream’ advisor who might only have 1–2 clients with Federal estate tax exposure (who might just decide to ‘make do’ with traditional planning software).

Nonetheless, the point remains that while Federal estate tax is narrower than it was, it is still highly relevant for those whom it’s relevant for, which is a non-trivial number of households, in a wealth segment where financial advisors already focus. And if the Tax Cuts and Jobs Act (TCJA) sunsets at the end of 2025, or Democrats pick up seats in the 2024 election and ramp up income, wealth, and/or estate taxes on ultra-HNW families, the focus may expand further. Which leaves Vanilla well positioned to pick up whatever market there is for the estate-tax-exposed clientele of financial advisors?

Wealthfeed Raises $2M Of Venture Capital As Organic Growth Demand Drives Digital Prospecting Tools

For all of its history, the financial advice business has been a sales business. In part that’s because in the early days, “financial advisors” were literally financial salespeople hired by product manufacturers and distributors (e.g., life insurance companies and brokerage firms) to sell their products. And in part it’s because even with the shift to fiduciary advice models, the advisor still has to sell themselves to convince the client to pay them for their advice.

And while this approach has been successful in the long term – thus why there are so many successful financial advisors today – it is challenging. Sales is hard. And it’s time-consuming. When advisors are successful with it, they get so many clients they run out of time to do it. Which usually leads to the hire of next generation advisors to repeat the sales process. But they’re often not as good at it. And if they are, the founder then usually has to split the equity with them, or they leave and hang up their own shingle.

Given these struggles – in getting the sales growth, or hiring the talent to scale the sales activity – the industry has increasingly shfited towards inorganic growth via Mergers & Acquistions, which a path to both growing top-line revenue (via the acquisition) and sometimes to “acqui-hire” the talent that comes with the acquired firm. Except in recent years, so many firms are engaging in M&A that only the most systematized acquisition machines are competitive enough to win deals, and the volume of purchase activity has driven up multiples from what was historically 2X revenue to as much as 2.5X – 3X revenue (and even higher for high-margin firms!).

Which is striking, because Kitces Research on Advisor Marketing shows that the typical advisory firm generates $0.90 of revenue for every $1 they spend on marketing – which conversely means the typical advisory firm spends $1 / $0.90 = 1.1X revenue to bring in new clients with its marketing (and the most efficient firms spend less than 0.5X), even as they spend 2.5X revenue to bring in clients via acquisitions. Leading to a growing demand for digital marketing and prospecting tools as the rising cost of acquisitions is driving firms to re-focus on the difficult-but-still-much-lower-cost organic growth instead.

In that context, it’s notable that this month, Wealthfeed raised $2M of capital for a new digital prospecting tool, that searches various data sources to find local (or sometimes even national) money-in-motion opportunities, from new movers to the area to recent marriages, and capital raising events to business liquidity transactions. Which advisors can use to either reach out directly to initiate a marketing and sales process with the identified prospect, or cross-reference that data against their existing mailing list/database/CRM of prospects, to identify which ones are most worthwhile to pursue (and have a catalyst event that implies they will likely to take action sooner rather than later).

From the advisor perspective… Wealthfeed itself appears to best fit advisors who have a more proactive ‘outbound’ appoach to prospecting, where Wealthfeed can provide a list of money-in-motion-qualified prospects to call (or knock, or email), and may be especially appealing to the insurance/annuity channels that still often pursue an outbound-sales approach. It may also have crossover applications to advisors with certain niches that tie to these money-in-motion events (e.g., divorcees, tech employees going through liquidity events, etc.). Wealthfeed’s service may also be appealing for those who have built sizable email lists of prospects, and want to figure out which prospects are most worthwhile to pursue by enriching with Wealthfeed data (similar to the service that Catchlight provides).

From the broader industry perspective, Prospecting is quickly heating up as one of the most rapidly growing categories on the Kitces AdvisorTech Map. Which makes sense, given that the economics of marketing and sales are so good; getting 1 client is a very good on any marketing tool (when advisors may generate $3k, $5k, or even $10k+ of revenue per client), and getting 2 new clients is amazing. (And more new clients than that is really scaling!). The caveat, though, is that most advisory firms still struggle to hire advisors (salespeople?) who want to prospect in the first place, and similarly lack the muscle to implement tools into their also-immature marketing processes.

Nonetheless, as marketing and sales systematization grows in advisory firms, if only for the economic arbitrage they represent (when advisors can acquire revenue through marketing at 0.5X – 1.0X revenue, and sell it to a PE firm for 2X–3X revenue or more!?), growth in this AdvisorTech category is likely to continue. And while there may be too many providers now for all of them to win – especially when there aren’t a lot of mature sales/marketing firms, there will be more, and someone has to win to fill the need. In WealthFeed’s case, the question will be whether they can provide better enrichment data than competitors (like Catchlight) for the few advisory firms that already have Prospect lists, or simply whether there are enough firms are ready to be proactive enough to actually use Wealthfeed for outbound prospecting?

SmartAsset Launches Advisor Marketing Platform (AMP) To Help Advisors Lift The Conversion Rate Of SmartAsset Leads

More than 50 years ago, industry legend Al Granum took over as a manager partner for the Chicago agency of Northwestern Mutual, and began what was at the time a truly unprecedented large-scale effort to track how financial advisors convert leads into clients, collecting (manually, before computer) data on more than 50,000 referred leads across his office’s agents over the span of a decade, and culminating in what is still known today as the 10/3/1 rule. Which found that out of every 10 leads a financial advisor was able to meet with, about 1/3 (i.e., 3) of them would become bona fide prospects, and 1/3 of those (i.e., 1) would become a client. Resulting in what Nick Murray subsequently dubbed a “Game Of Numbers” – if advisors do the work to get in front of enough leads, they will eventually get through the 9-out-of-10 “no’s” to get to the next client.

Yet notwithstanding the remarkable durability of the 10/3/1 rule – which even today, advisors still frequently cite as their results for everything from networking to seminar marketing – advisors have still tried over the years to improve upon the rule. One approach is to try to improve the conversion rate to something better than 1/3 and 1/3, in the hopes of having fewer “No’s” and more “Yes’s” for every 10 leads they get. The other approach is to simply embrace the so-called Game Of Numbers, and accelerate the number of leads, in order to get to the 10/3/1 outcomes faster and therefore accumulate new clients more quickly.

Which has led in recent years to the rise of a growing number of lead generation platforms, whose goal is to generate a higher volume of leads to which advisors can then apply their 10/3/1 process and get more new clients. With the caveat that if lead generation platforms try too hard to generate a high volume of prospects, there is a risk that the quality declines, and what was a 10/3/1 outcome becomes 15/3/1 or 20/3/1 or worse. And in point of fact, this appears to be exactly how the dynamic has played out, with the latest Kitces Research in Advisor Marketing finding that lead generation platforms may provide a desirable volume of leads, but have been providing a relatively low quality of leads, which at best require more of the advisor’s time to “chase” and follow up with the prospect, and at worst simply result in a higher volume that don’t become prospects (and thus certainly don’t become clients).

Which helps to explain why this month, lead generation platform SmartAsset announced the launch of a new Advisor Marketing Platform (AMP), which leverages lead nurture campaigns, automated calling and texting, and even sets up “live connections” (where SmartAsset gets the prospect on the line before the advisor has to pick up the phone call) to increase the likelihood that advisors can actually talk to a prospective SmartAsset lead, and that when they do talk to the lead there is an increased likelihood they will ultimately become clients.

From the advisor perspective, the SmartAsset AMP offering makes sense; even amongst advisors known to be very successful with SmartAsset, a 20/3/1 conversion rate (where only 5% of leads become clients) was typical, which was particularly challenging in a world where Kitces Research has shown that advisors prefer lead quality to raw quantity (out of a dislike of needing to wade through a high volume of “no’s”, or even worse, leads the firm paid for that won’t even respond to phone calls and emails. And while in theory any financial advisor could set up automated marketing systems to nurture their SmartAsset leads, most firms have little experience in building marketing funnels. Such that SmartAsset’s “all-in-one” packaged solution around its own leads makes a lot of sense, and to the extent it results in more leads turning into bona fide prospects (and clients), should lift advisor satisfaction rates with SmartAsset.

In the broader industry context, SmartAsset’s AMP launch helps highlight an indirect gap in most advisor’s business development efforts – firms that buy leads often lack the digital marketing tools to nurture them (leading to dissatisfaction with lead quality), and firms that buy digital marketing tools often lack a “top-of-funnel” system to get a steady flow of lead into their marketing pipeline (leading to dissatisfaction with those solutions as well). Which raises the question of whether SmartAsset might be the first in an emerging trend of “vertical integration” of lead generation and marketing tools, where pre-built combinations of both succeed more than either can alone (when the vendors have to rely on advisors patching the systems together).

Overall, though, the reality remains that there is a hunger from financial advisors for more turnkey systems to generate organic growth that actually work. Yet at the same time, because advisors disproportionately weigh lead quality over quantity and even outcomes, solutions like SmartAsset may average out to favorable client acquisition costs and marketing efficiency in the long run, yet still struggle to retain advisors who don’t want to spend the time it still takes to wade through the “no’s” to get to the “Yes’s”. Which points further in the direction of lead generation platforms that increasingly fulfill “all-in-one” capabilities so advisors can simply do what they do best – talk to prospects who are interested in becoming clients, and service those clients once they say “yes”.

Shaping Wealth Launches "Lydia" AI Tool As A Training Partner For Advisors On Behavioral Finance Conversations (Instead Of Replacing Them)?

Success as an advisor is a combination of knowing the 'right' answer/advice, and being able to deliver it in a way that clients will actually act. Despite all of their so-called behavioral biases that keep them from implementing and following through. Which makes sense – if everyone acted promptly and rationally, there wouldn’t be much need for financial advisors in the first place. Instead, this what makes financial advice hard, and therefore rewarding.

But that also makes it difficult to learn. The book knowledge and the CFP exam is hard enough. But at least you can read and study for that. When it comes to how to deliver the advice in a way that clients will implement – especially in behaviorally sensitive situations like clients who are panicking in volatile markets are want to sell (and are especially NOT receptive to logic!) – it takes not just book knowledge but practice. Which is hard because you need clients TO practice. Except you may need the practice to GET the clients. 😉

Which opens an interesting new door in our emerging age of artificial intelligence, given the ability of AI to leverage Large Language Models (LLMs) to “learn” to converse with human beings. Some have suggested that this may be a path to potentially replace human financial advisors with AI bots who “talk” to clients to gather their information and provide them financial advice. Except it’s not clear how soon consumers will really be ready to ‘blindly’ take the advice of a computer about sensitive money issues. Or more substantively, whether or how quickly AI will be able to not only figure out and calculate the “right” advice answer, but to deliver it in an emotionally intelligent manner to not-always-rational human beings.

To address this challenge, it’s notable that this month, behavioral finance training platform Shaping Wealth announced the coming launch of a new behavioral-finance AI solution (developed in partnership with Alai Studios). However, the tool, dubbed “Lydia”, is not aiming to replace financial advisors in their behavioral-finance conversations with clients; instead, Lydia is intended to be a conversational agent to help advisors practice and train in how to make themselves more effective in those sometimes delicate client conversations! Or stated more simply, Shaping Wealth’s Lydia isn’t aiming to replace financial advisors in their advice to clients; it’s aiming to replace clients in the training of financial advisors!

From the advisory firm perspective, solutions like Lydia will likely be very appealing, especially for larger advisor enterprises that may hire dozens, hundreds, or even thousands of financial advisors, and have a particular struggle in how to train all those advisors on better communication techniques with clients. As ultimately, it’s very hard to learn how to have better conversations, short of actually having the conversations and learning from the experience (or potentially, the consequences of a conversation gone wrong). Except newer advisors may not have any clients yet in order to practice those conversations, and most firms are loathe to give their existing clients to new advisors to learn and practice (at the risk that they’ll make a mistake while they learn, and lose the client). Which makes an AI agent that “pretends” to be the client an appealing alternative approach to advisor training.

From the broader perspective, though, the caveat to tools like Lydia is simply whether they can really be effective in emulating what clients do… especially the emotional, behaviorally-biased, “irrational” actions that are most challenging for advisors to deal with, and most unlike the way that logic/computationally-driven computers (i.e., artificial intelligence) would behave. After all, practice conversations for advisors with an AI-emulated client are only as effective as the AI tool is in acting the way that a client really would. Which is especially difficult to train when much of the conversation will hinge not just on the words the advisor chooses, but the tone and style of their delivery… nuances that even LLM-trained AI tools may not be able to pick up on yet.

Nonetheless, given the lack of any tools today that allow advisors to meaningfully practice difficult client conversations – short of time-consuming and costly 1:1 or small-group individual coaching – the appeal of tools like Shaping Wealth’s “Lydia” is clear, and even a tool that isn’t a perfect emulation of nuanced client situations can still help to train the fundamentals for advisors in how to improve their “Emotional IQ” and practice better conversations. And so as the industry continues to focus more and more on behavioral finance – and more generally on the psychology of financial planning – emerging AI-driven solutions like Lydia seem well-positioned to capture an emerging new approach to AI-driven training of financial advisors? 

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In the meantime, we've rolled out a beta version of our new AdvisorTech Directory, along with making updates to the latest version of our Financial AdvisorTech Solutions Map (produced in collaboration with Craig Iskowitz of Ezra Group)!

So what do you think? Are you thinking about changing any of your key software tools after recent price increases? Would you prefer a lead generation platform that does everything right up to the point of simply putting a prospect appointment on your calendar, or do you prefer to build your own marketing funnel? Do you think an AI agent could become an effective training partner for (new) financial advisors? Let us know your thoughts by sharing in the comments below!