Using AI to Give Clients What They Want, but Aren't Getting

Artificial intelligence certainly invites controversy. 

What the emerging technology can do for estate, tax and insurance planning can “sweep [clients] off their feet,” Andrew Altfest, co-founder and CEO of FP Alpha, tells ThinkAdvisor in an interview.

In 2020, the firm introduced what Altfest says was the first AI-driven tool for advanced planning. Previously, that work was dealt with manually and only for the most well-to-do clients, he says.

Altfest, president of Altfest Personal Wealth Management who came up with the idea for the fpAlpha tool, said the firm created it by building its own large language models for advanced planning.

The platform, which produces actionable recommendations for clients based on financial experts’ input, is available to all advisors for use across their full client base.

In the interview with Altfest, who views AI as “a genius assistant,” he notes that the technology’s talents are “very helpful in closing prospective clients.”

Here are highlights of our conversation:

THINKADVISOR: To what extent will artificial intelligence change the financial advisor profession?

ANDREW ALTFEST: I definitely think AI is going to transform the industry because of how little of the workflow we’ve been able to automate till now — only back-office stuff. 

AI will streamline the advisor’s analysis and communication and be a genius assistant that allows them to spend more time with clients and build stronger relationships.

When you show prospective clients what AI can do for them that they’re not getting — even a client who isn’t huge — these things tend to sweep them off their feet. It’s very helpful in closing prospective clients. 

Has AI become a trend among advisors?

The wave has already started. It’s only going to gain momentum within the next couple of years.

When other advisors hear about the success of the early adopters gaining results in time saving and practice growth, they’ll follow.

What are the challenges in using AI technology?

The first one is that advisors need to re-envision the work they’re doing with AI. They have to rethink their strategies now that they have this powerful new technology. 

The second challenge is compliance.

Advisors have to think about their work in the context of AI: What can be automated, how clients can be better served, how to bring in more new clients.

It’s not just the technology that exists today but also what’s going to be available and what that means for managing the advisor’s business,

So advisors will need to work differently, which is always an adjustment.

Launching FP Alpha in 2020, you introduced the first AI-driven tool for advanced planning: estate, tax and insurance planning, you point out. Which needs did your tool meet? 

Before, everything was done manually — gathering the data, reading the documents, analyzing for the best solutions.

There was no estate planning, tax planning or insurance planning technology that was aligned with the advisor’s workflow.

Advanced planning, done only for the wealthiest clients, was [executed] manually by individuals poring over documents for hours and hours.

The tools that existed were in the world of the old economy, and they never turned the data into actionable planning, as AI does.