March 12, 2025 • 47 mins
Financial planners and AI tools can coexist to provide better service, with each bringing different strengths to the financial planning process. In this episode Jess and Brandon discuss the rise of robo-advisors and how they compare (and don’t) to comprehensive financial planning.
In this episode we discuss:
• How AI excels at portfolio management
• How budgeting apps use AI to categorize transactions and provide spending insights
• How comprehensive financial planning differs from simple investment management
• How AI and humans can work together to enhance services
• Robo-advisor fees versus human advisors
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
In today's episode we are going to discuss if AI will
replace human financialplanners like Brandon Hopefully
not.
We're going to talk about howAI is revolutionizing various
industries, what AI can do infinancial planning, what AI
can't do and why human financialplanners will still matter, and
(00:22):
how AI and humans can worktogether to give the best
experience.
Stay tuned.
Speaker 2 (00:39):
Hey babe, what are we talking about today?
Speaker 1 (00:42):
Today we are venturing into my world a little
bit and we are talking about AI, artificial intelligence, but
not in the technology space thatI'm in for work, but in your
space and financial planning.
Speaker 2 (00:59):
Yeah, are they going to take over my job?
Speaker 1 (01:01):
Right, I think that you know it's so funny because
people are like oh, ai is so new, ai is so new and AI is not new
.
So that's first and foremost.
I know for many people it feelslike it has come out, you know,
in the last year or two, maybethree years, but it's actually
been around for an extremelylong time.
But now it is more accessibleto us, you know, and we're using
(01:25):
it in like the chat, gpt, prepmy meals for the week, write me
a shopping list, plan thisvacation, help me write this
email, kind of way.
But it's actually been aroundfor quite some time.
And so, you know, I think, withthe rise of AI, people very
much are like is AI going totake my job?
And what I typically say is AIis not likely to take most
(01:51):
people's jobs, but it could verywell replace you if you're not
willing to learn about it.
Speaker 2 (01:57):
Yeah, I definitely remember reading a lot of
articles, you know, a few yearsago, when the rise of
robo-advisors started to comeout and it was like you know,
robo-advisors are going to takeover the roles of financial
advisors.
They can do it for cheaper,they're smarter.
All these things and I canhonestly say, you know, a few
(02:18):
years into this, hasn't affectedme and it hasn't affected, you
know, other colleagues that Ihave that are within the field,
because I think that there hasbeen a shift in regards to maybe
what our primary focus and whatour main offering may be, but
as far as replacing us, overall,not at all.
And personally I use AI withinmy practice to help become more
(02:42):
efficient and help in certainaspects that obviously AI can do
significantly better than anyhuman.
Speaker 1 (02:48):
Yeah, one of my favorite uses for AI and I do
this almost daily is recordingall of my work calls, and then,
you know, I get a transcript, Iget next steps, I get follow-up
items.
I mean all of the stuff thatyou do in work that's very
manual, you know, can, can beutilized with technology to make
(03:10):
life easier.
It's also great, you know, inthose instances, hey, if I'm out
and I need to revisit a callthat I wasn't a part of or you
know for you I know you'vetalked about you know recording,
helping it summarize the call,getting the next steps, getting
action items I mean those thingsare the manual tasks that are
(03:33):
very labor-intensive, that takeup a lot of time, and so AI has
a lot of use cases for that.
For that I don't know that Iwould have ever leaned towards a
robo-advisor, but I think I've,of course, am biased because I
know how much you do for notonly our family but for your
clients, and you're just notgoing to get that from a machine
(03:54):
.
You're just not.
Speaker 2 (03:56):
I also.
You know, just like you.
One of the things you said thatI say that I do is I do record
my meetings with clients and allmy clients get a detailed recap
meeting email with action items, and I use a program called
Fathom in order to produce those.
It makes my life significantlyeasier because before I was
taking notes and then creatingthe email myself, as compared to
(04:18):
now, it creates it for me.
I maybe make a few adjustmentsin there and then I send it out.
So cuts down on the timing thatit takes for me to do these
things.
But I think people have adifferent idea of what a
financial advisor a goodfinancial advisor brings to the
table in comparison to what arobo-advisor can do for you.
Speaker 1 (04:41):
Well, do we want to start with what AI can do in?
Speaker 2 (04:46):
financial planning yes.
Speaker 1 (04:47):
Because there are positives.
This is not us knocking AI,because obviously we use it
every day.
Speaker 2 (04:53):
So, when it comes to the investing aspect, as far as
putting together a portfolio, Ithink AI can do a significantly
better job, and a lot ofadvisors are using AI to put
together portfolios Because,basically, when it comes to
putting together a portfolio andanalyzing, hey, how should we
put this portfolio togetherbased upon this person's goals,
their risk tolerance and whatthey're looking to achieve, a
(05:15):
lot of that is based uponhistorical performance.
You may have heard the saying.
Like you know, historicalperformance is not indicative of
future performance, but that'sall we have really to look at in
order to maybe have an idea ofwhat's going to happen in the
future.
And obviously, ai can do asignificantly better and much
faster job of analyzinghistorical performance than any
(05:37):
human or any number of humansput together.
So, from a portfolio managementstandpoint, you have AI.
That's being incorporated intopretty much almost any platform
for that.
Speaker 1 (05:46):
But aren't you also able to utilize that for your
clients, oh?
Speaker 2 (05:51):
100% Right.
So the thing that I think Ihave a better edge on when I'm
using it, as compared to, maybe,a client using it by themselves
, is that any technology thatyou're using, if you have a
better understanding of thesubject matter and what you're
using that technology for, youare going to be able to use the
technology better.
So think about it this way Ifyou were in high school and you
(06:13):
were in math class, all right,and you have a math test and you
have a calculator, you have acalculator that can help you do
all the calculations, but youhave no idea which equation you
need in order to solve theproblem.
It doesn't matter if you havethe calculator there, you don't
know what equation applies tothe problem that you're trying
to solve.
Speaker 1 (06:31):
So you don't even know what to like chemistry
class.
Speaker 2 (06:34):
So you don't even know which calculator.
You don't even know whichinformation you need to put into
the calculator.
Even though you have the toolthat can provide you with the
answers, you don't know what toput into it in order to get out
the answer that you need.
Speaker 1 (06:45):
Yeah, that's a really good call out.
Even you know.
Again, I think most peoplelistening probably have tinkered
once or twice with chat, gpt.
But it's all about the prompt.
If you put in a garbage prompt,guess what Garbage in, garbage
out.
So it's the same concept of youhave to know how to utilize the
tool, you have to know how toprompt the engine.
You have to understand thatit's training and learning from
(07:09):
you.
If you are not utilizing itcorrectly, then it's not being
trained correctly and you'renever going to get the best
possible outcome.
Speaker 2 (07:17):
That even goes back to conversations we've had about
using LegalZoom to create awill.
The issue that you run intothere is that it's based upon
the information that you put in.
Now, you might be puttinginformation in and you might be
putting the wrong information.
However, it's actually givingyou the correct information for
what you put in.
Speaker 1 (07:40):
Have you been listening to our podcast and
wondering how am I really doingwith my money?
Am I doing the right thingswith my investments?
Am I on track to reach myfinancial goals?
What could I be doing better?
If you answered yes to any ofthese questions, then it's time
for you to reach out to Brandonto schedule your free yes, I
said free 30-minute introductionconversation to see how his
(08:03):
services could help make you themore confident moneymaker we
know you could be.
What are you waiting for?
It's literally free and at thevery least, you'll walk away
feeling more empowered andconfident about your financial
future.
Link is in our show notes.
Go, schedule your call today.
Yeah, but now that we are goingthrough that pre-nup, post-nup
(08:26):
process right for legal Zoom, etcetera, et cetera we've had
those conversations of, likecheap can be expensive, right,
You're going to Staples buyingthe DIY kit out of the box,
You're printing it offline.
Even the other night we werewatching Love is Blind and she
had printed off the prenuppapers and put them down and
said you know, here you go,which clearly that was not a
(08:49):
collaborative process.
But again, what are you puttingin and what are you going to
get out?
So you think you're doing theright thing, but who knows what
you actually are getting in,that legally kind of binding
contract.
It's certainly not the best itcould be.
Speaker 2 (09:02):
I think another thing that AI does a really great job
is there's tons of differentbudgeting apps.
So essentially what a lot ofthese apps are?
Account aggregators.
You put in information for thedifferent accounts you have.
You know your bank account,credit card, whatever savings
account, whatever it may be, andit's able to pull in all the
information from thetransactions, categorize them
(09:22):
and give you some insights toyour spending habits.
I think obviously AI is greatfor that, because the only other
way to track that is manuallyand that's looking at your
statements at the end of eachmonth and maybe putting into a
spreadsheet and doing all thathard work, which obviously some
people love doing it, and that'syou know.
If spreadsheets are your jam,be my guest, not my jam.
(09:42):
I much rather work smarter, notharder.
Speaker 1 (09:44):
Well, and everybody's living on their phone.
So the reality is is most of uswould probably want to check
our budgets and our spending onour phone, because it's our
little pocket computer and soit's right there.
Do you have any favorites nowthat mint is gone favorites.
Speaker 2 (10:06):
Now that mint is gone um, mint became I want to say
became monarch money?
Speaker 1 (10:08):
no, it became.
I think it became monarchpeople are raving about monarch.
Speaker 2 (10:10):
I don't think it's free.
Speaker 1 (10:10):
It's not free but people love the interface.
They love that it's.
It's really great kind of rightout of the box, but you can
also customize it for your needsand the u UI UX is fantastic.
I've heard nothing but goodthings.
Speaker 2 (10:22):
Yeah, I haven't used it personally since it became
monarch money, since I haveplanning software that I can use
for that that I already pay for.
Speaker 1 (10:30):
We're not trying to have multiple subscriptions for
the same thing.
Speaker 2 (10:33):
But even in those scenarios like so, for example
with the account aggregation andcategorizing of transactions,
Sometimes AI doesn't get thecategorization correct.
Speaker 1 (10:43):
Right.
Speaker 2 (10:44):
And you have to go back in and do it manually.
But the nice thing is that itlearns and it recognizes, when
the new transaction comes in,where it should go.
But there is still some humanaspect to checking to make sure
that things are done correctlyand not just simply relying that
the AI technology is at 100percent.
Speaker 1 (11:00):
Right.
Even we've had to do that inyour planning software
RightCapital where, I don't know, maybe like CVS was shopping
and we know that it's pharmacybenefits because we're not
shopping at CVS type thing.
So you have to put a little bitof work in to get it to where
you want it to be.
But then it will work for youand it will learn and as you
train it it will get better.
And it will learn and as youtrain it it will get better.
Speaker 2 (11:23):
And one other way that people are using it, which
really I wouldn't say isapplicable to most of the
population, is algorithmicinvesting.
So that's going to be like someof the people that are doing
the trading day trading andthey're looking at you know
times to buy, sell stuff of thatnature.
Now, obviously, that doesn'tnecessarily apply to most people
, but it analyzes patterns andit does a much better job of
(11:46):
analyzing patterns than you know, a single individual could do.
And that's another way that AIis definitely being used and can
be beneficial.
Speaker 1 (11:52):
Yeah.
Are there any other ways thatyou feel like AI has a benefit
in the financial planning world?
Speaker 2 (12:00):
Honestly, I mean other than maybe some of the
back office stuff, when it comesto paperwork being done and
stuff of that nature, yeah,those jobs could potentially be
downsides, because I don't thinkthey're going to be eliminated
only because you do have to havesomebody to manage, obviously,
the technology itself to makesure things are still done
correctly.
But I definitely see from thatstandpoint like transactional
(12:21):
standpoint.
But the main thing you knowfrom a client facing interaction
that I would have, I would sayit's more or less the investing
aspects of the portfoliomanagement, stuff like that.
Speaker 1 (12:33):
Yeah.
So if we're thinking AI roboadvisors right, everybody online
is like, you can do it yourself.
You don't need to pay somebodyand like yes again, if you want
to spend hours and hours andweeks and weeks and months and
months learning proper financialplanning, all the rules, the
tax implications, you know, andthen, on top of that, you know
(12:56):
the checkups, we have an entireepisode on DIYing your finances
and all the things you're goingto have to consider.
But most people again, this isnot where you spend your time,
so you will miss things.
So, talking about therobo-advisor, you know, is the
robo-advisor going to ask you toupdate your beneficiaries after
you go through the divorce?
Is the robo-advisor going totell you to up your life
(13:18):
insurance now that you have kidsor you bought a bigger house or
you got a new job and you'remaking $200,000 more?
Is the robo-advisor going tohelp you really make the most
out of the comprehensiveportfolio and all of the life
stuff?
I feel like the life stuff iswhat's so important that you
(13:38):
don't want to miss out on.
Speaker 2 (13:39):
Yeah, I mean there is a draw to the Betterments
Wellfronts, schwab, intelligentPortfolios and the main draw to
that for most people, in allhonesty, comes down to cost.
That's.
The reality of it is that Ithink people are trying to find
the least expensive solution,and I completely understand
wanting to make sure that you'renot overpaying and being cost
(14:01):
conscious.
However, cheap isn't always thebest option.
Speaker 1 (14:08):
Cheap can be expensive.
Speaker 2 (14:10):
And, at the end of the day, that's what this is,
and the thing is, too, is that Ithink it's also there is full
financial planning andinvestment management are not
the same.
Now, investment management canbe part of financial planning,
but investment management is notfull financial planning.
Speaker 1 (14:28):
Can you expand on that?
Speaker 2 (14:29):
Yes.
So with investment management,all someone is doing is saying,
for example, like you have$100,000.
You want to invest it in themarket.
It might ask you some questionsaround risk tolerance, which is
a questionnaire that I give topeople to just simply understand
how they manage risk, how theyreact to risk.
It's not the by all meansindeterminate factor of how
(14:50):
we're going to invest, but it'ssomething that we can have a
conversation about Now with arobo-advisor.
It is, by all means, going tobe the end result.
So, for example, you might besomeone that wants to be
aggressive, but once you gothrough the risk questionnaire,
you end up becoming conservative, and with most robo advisors,
they're going to justautomatically put you into a
conservative as compared toworking with me.
Now we have a basis for aconversation.
(15:11):
Why did you answer thequestions this way?
Did you understand thequestions?
And then maybe we might have aI have a conversation that leads
you a better understanding ofwhy we should be more aggressive
.
Thus we can now become, youknow, invest in a more
aggressive manner.
As compared to a robo-advisor,it's really not going to have
that back-to-back interactionand that explaining factor that
comes along with it.
Now, what it's going to do issimply, you know, taking that
(15:33):
risk assessment how long do youapproximately want to be
invested in the market someaspect, because that's also
going to be a determining factorof how aggressive you can be
and then it puts together aportfolio for you, so it just
simply manages the money thatyou gave it.
So you hopped online, you had$100,000, you put it into the
robo-advisor and they invest itfor you.
(15:54):
Now the one thing they're notgoing to do is make sure hey, do
you have an emergency fund setup?
Can you actually invest allthis $100,000?
Or would it be maybe better ifyou invested half of this
$100,000 because you don't havean adequate emergency fund?
Also, they didn't ask youquestions about any other goals
that you maybe want to achieve.
Oh, by the way, you want to buya house in the next two years.
Maybe you don't invest theentire $100,000 so that you have
(16:16):
a down payment for the home.
It doesn't ask you all thosequestions.
It's a very basic,straightforward kind of like.
If you're going to be a DIYer,it helps out.
Or if you're someone that'smaybe just getting started in
investing, it can help you outas far as doing that, but it's
not full financial planning atall.
It is strictly investmentmanagement.
You give it the money, itmanages it.
(16:37):
It doesn't ask you any otherquestions.
Speaker 1 (16:39):
Yeah, and I know you're so big on goals and what
you say.
It drives me crazy.
But I obviously understand whyyou say this all the time when
people ask you questions andyour response is it depends.
It depends.
And, like you said, shouldeverybody max out their 401k?
It depends.
What are your goals?
Are you going to need to bemore liquid?
Do you?
Are you saving for that downpayment on the home, whatever
(17:02):
that might be?
Like you said, the robo advisorfor lack of a better word is not
going to give you that humantouch of conversation to really
dig into what are your goals?
What do you want your money todo for you?
How do you envision your lifeinto 5, 10, 20 years, etc.
So I think those are theconversations that really I mean
(17:24):
, you're great at them butreally help people understand.
Oh, these are why we're makingthe decisions we're making.
When you were talking about,you know, plugging in your money
, talking about your, maybe yourretirement age, it reminded me
of our 401k episode where wetalked about the target date
fund and like, yeah, maybe ifyou're auto-enrolled and you
don't do anything, you'll beokay.
(17:45):
But then we talked about myspecific 401k, which is more
aggressive than what the targetdate fund would have provided,
because we know we're nottouching that money.
We know that this is along-term play, so let's be as
aggressive as possible, becauseI'm 20 years away from
quote-unquote or 25 years awayfrom quote-unquote retirement
(18:05):
age, so let's maximize thoseyears.
Speaker 2 (18:07):
I think so that with the robo-advisors they're also
going to basically operate kindof on the rule of thumb rather
than the nuance.
Speaker 1 (18:15):
And so much is nuanced right with people's
situations.
It's personal finance Right.
With people's situation.
Speaker 2 (18:18):
It's personal finance .
Speaker 1 (18:19):
Yeah.
Speaker 2 (18:20):
So you know, rule of thumbs don't always work for
everybody at a given time.
So the biggest thing with it,too, is that you're going.
You also don't get this aspectof, for example we were
literally talking about theother day.
There's a lot of rules in placethat people can easily get
(18:41):
confused.
So, for example, one of thethings that I don't see enough
of on social media, I believe,is that with IRAs, individual
retirement accounts if you justhopped on social media, you
would think that everyone couldtake advantage of a traditional
IRA and the sense of puttingmoney away pre-tax.
So when you put money into theIRA at the end of the year, when
(19:01):
you file your taxes, you'reletting them know that you put,
say, $7,000 into an IRA and thatlowers your taxable income for
the year by $7,000 because it'sgoing in pre-tax.
So they think that they couldjust all take advantage of that
pre-tax contribution.
Speaker 1 (19:14):
That's what the internet says, so it's got to be
real.
Speaker 2 (19:16):
No.
Once you exceed a certainincome threshold, you cannot
deduct that contribution in anIRA.
Speaker 1 (19:26):
So you can't just to be clear, because we had a long
discussion about this you canput that $7,000 in the IRA.
That is absolutely go put thataway.
If you have it, you know, letit sit there, let it grow.
But what Brandon is saying isyou, if you are high earner, you
(19:47):
might not be able to get thetax benefit which is really why
people want to put that money inthe IRA.
Speaker 2 (19:51):
I mean there's other benefits to it.
Because, um, I mean there areother benefits to it, but not in
the same fashion as if you wereable to take the deduction,
because there was different waysthat I would go.
There's a different way that Iuse it for for clients that we
don't need to get into here, butyou would have the internet,
would have, you think, theneveryone can do that deduction
and it's stuff like that.
When it comes to the littlespecific rules or, like you know
(20:12):
, with contributions to a RothIRA, if you make a certain
amount of money, you can'tcontribute directly to a Roth
IRA.
You have to do a differentprocess.
And it's those little ruleswhere, like, if you don't know
them, I don't know if AI isgoing to give that answer to you
, because it's based upon whatyou put in and how you prompt it
.
Speaker 1 (20:28):
Yeah, well, and I think, too, what you're kind of
alluding to is it really isgoing back to like the goals of
what you want your money to dofor you, because money is a tool
.
So also, I think you have somany conversations about the
emotional aspect right Of money,and you're you have these
(20:48):
conversations all the time andyou're always joking around
saying like I should have gottena psychology degree, because so
we all have an emotionalattachment to our money.
We all want to do what'simportant to us with our money,
and so I feel, like you, you doa lot of handholding and
reassuring with your clients tolet them know, hey, we've
planned for this.
Or you're, you're good, go, youknow, get that nice closet
(21:13):
install.
Or go get that bathroom remodel.
Or yeah, you can afford thesecond lake house, like I feel
like you are constantlyreminding people of like hey,
we've done this work and nowyou're actually in a position to
spend the money the way we'veplanned for it.
Go, do that, it's okay.
Speaker 2 (21:29):
I mean, there's so many things in life that we know
that we should do and it's notjust within finance.
For example, your health.
You should need a bunch ofunhealthy food, you should
exercise.
We all know these things, butwhy don't we do them?
Speaker 1 (21:42):
Because there's nobody holding us accountable.
We don't have a partner.
Buddy workout accomplice.
We have to get over our headtrash.
Speaker 2 (21:49):
We have to deal with, you know, maybe past traumas.
Speaker 1 (21:52):
So much.
Speaker 2 (21:52):
And understand a financial literacy like you know
, a lacking of understanding ofcertain things.
There's so many things that gointo making a decision and then
taking action, and it hasnothing to do with the black and
white numbers.
Speaker 1 (22:07):
Yeah, and you help move people along with that
decision making, with theactions that need to be taken.
I don't know that AI is goingto build you a to-do list of
what to do, and even if it does,it doesn't make you do it,
right, right.
And even if it does, it doesn'tmake you do it, right, right.
Speaker 2 (22:20):
So, like it's not, ai is not going to constantly call
you and send you emails andremind you of your goals that
you were, you know you want toaccomplish and make sure that
you get these things done.
Yeah, Because if it was simple,as you knowing, you needed to
know the information in order todo something AI doesn't need to
help you.
We had, you still have theinternet.
You can still look things up.
You could have been alreadydoing that.
So if you're someone that has ahard time with actually
(22:42):
completing stuff, it doesn'tmatter what AI does until they
get to the point where AI canliterally be a second version of
you.
That does it.
Yeah, it doesn't matter.
You know you're not.
You have to take the action.
And also, the thing is, too, isthat we always talk about what
the financial planning aspect is.
It's not a one time thing, it'scontinuous.
So you're going to keepcontinuing to revisit the plan,
(23:06):
continuously, monitoring thingsin your life.
What's changing, what haschanged in my life that now is
going to alter the plan.
Like you know, if you'resomebody that has, you know
you're married, have two kidsand that's all you planned on
having.
I have my plan in place.
Oops, have two kids, that's allyou planned on having.
I have my plan in place.
Da da, da da.
Oops, I didn't get a vasectomy.
Now we have a third kid and wehave friends.
Speaker 1 (23:26):
We all know where babies come from.
Speaker 2 (23:27):
That has happened too , where they didn't necessarily
plan to have three kids, butthey're happy they have them,
but it changes the plan.
My point is is that you'regoing to always have to
constantly change things andsometimes you might have had
something changed in your lifeand you, by yourself as an
individual, aren't going back torevisit a plan that was based
upon different parameters,whereas as your advisor, I'm
constantly following up with youhey, what's going on new in
(23:50):
your life?
And even giving some promptssometimes, because sometimes
people are like, oh no,nothing's new.
Well, you know, job's still thesame.
You know, still making the sameincome, da, da, da, stuff like
that.
Speaker 1 (23:58):
Oh no, I got a promotion and da, da, da, da, da
, right the prompt memory is asfar as like what has actually
happened.
Speaker 2 (24:05):
Ai doesn't do that.
Speaker 1 (24:10):
Yeah, I think one of the other things you know
talking about that emotionalaspect of finance is I mean, you
have clients where somethingwill happen right In this
climate.
Something's constantlyhappening in the news and we can
can't even keep up and we'rejust being flooded with like
information, misinformation, andyou're having to decipher like,
oh my gosh, should I bepanicking right now?
So I feel like you also havethat.
(24:31):
You, you often say that you'rekind of the stop, the stop sign
between your clients and baddecisions, Whereas, like, if
you're just kind of pluggingthings into a robo advisor,
they're not going to say, hey,don't forget, this is a 20 year
plan.
We're not going to panic, we'renot going to move money, You're
not going to start storing itin a shoe box under your bed,
(24:53):
Like it will be okay.
Speaker 2 (24:55):
I'm the wall between them and doing something stupid.
Yeah, and at that I'm notsaying my clients are stupid,
because my clients are extremelybrilliant people in so many
different ways and way smarterthan me in a lot of aspects.
Speaker 1 (25:05):
But even this.
Speaker 2 (25:07):
Yes even the smartest people that thoroughly
understand the plan that we areworking on, they have great
financial literacy, they stillare emotional human beings and
you have an emotional attachmentto your own money.
So, even though you know hey, Iknow this information from a
black and white standpoint, butthis is what I'm feeling I have
(25:29):
those conversations often withclients to be like to bring them
back down, talk them off theledge and also just reinstill
confidence and the plan that wehad put in place and we talked
through.
And often it's sometimes justme listening to what's going
through their head, because Idon't want to just simply say to
someone don't worry about it,because that doesn't work.
(25:50):
It doesn't work that way.
I need to really listen to themand understand what it is that
is worrying them and just have aconversation, human to human,
human, to maybe help not maybeeliminate all their you know
fear or emotions that are goingon at that moment, but to lessen
them and kind of bring themback to the logical side of
(26:10):
thinking when it comes tocertain things yeah, what about
the like ethical fiduciaryresponsibilities?
Speaker 1 (26:18):
I mean, I feel like I'm sure you're signing your
life away.
You know you're going to clickthat like accept terms and
conditions that nobody reads butwe probably should.
And then something goes wrongand you're like oh wait, I
didn't mean to do that.
And they're going to be likecool, bro, you did it and you
clicked accept conditions, likewhat about that kind of stuff
(26:40):
where people might make bigmistakes that cost them a lot of
money?
Speaker 2 (26:45):
Well, I can say from the fiduciary standpoint for
example, a lot of these AIproducts are specific to the
financial institution thatyou're working with.
You know, and at the end of theday, that financial institution
is trying to make money.
So, even though they're tryingto help you out, bottom line is
that they're trying to makemoney, stay in business, make
(27:06):
money, make their shareholderswealthy.
So, ultimately, at the end ofthe day, some of the things that
they may suggest, the thingsthat they may do, aren't always
necessarily putting you first.
It's going to be putting thecompany first.
Whereas I'm not beholden to aspecific company, the only quote
, unquote company I'm beholdento is my own company, and the
basis of my own company is to dowhat's best for my clients.
Speaker 1 (27:27):
Well, and that's why you went independent to begin
with because, that way, you canuse whatever company you want
for whatever products are needed, without having to feel like,
oh, I can only you knowprescribe you Fidelity products
or only Schwab products or onlywhatever.
Like now you can go anywhereand make sure that your clients
are getting the best product,the best price, etc.
(27:49):
I feel like that was one ofyour really big motivators in
opening up your own planningfirm.
Speaker 2 (27:55):
Yeah, because when you're utilizing just one
company, then, like you said,like you're not maybe using a
full tool belt.
You only have a few selecttools.
When I switched to beingindependent, I could have an
entire tool belt plus sometoolbox tool shed everything.
Speaker 1 (28:13):
Well, I feel like, too, one of the things that
comes up often is like lifeinsurance right.
So if you're, yeah, you can getlife insurance through State
Farm, but you're going to getState Farm life insurance right,
so do you're yeah, you can getlife insurance through State
Farm, but you're?
Speaker 2 (28:26):
going to get State Farm life insurance right, so do
they have.
Well, you just made a face,well, the thing is all right.
So I'm not saying if you haveState.
Speaker 1 (28:31):
Farm life insurance.
Speaker 2 (28:31):
That's great.
It's better than having nothing.
I am of the mindset where youcan't do everything great.
Mm-hmm I don't think of lifeinsurance in State Farm.
Speaker 1 (28:38):
Walmart has everything.
Walmart doesn't do any likeWalmart doesn't like.
Speaker 2 (28:41):
Walmart has everything.
Walmart doesn't do everything?
Great, they do everything.
Okay, now, granted, obviouslythe company makes a ton of money
.
Speaker 1 (28:50):
We're not gonna even go there, but but I think I
would prefer do you think thebest mechanics work at Walmart?
Speaker 2 (28:57):
I'm just saying like if I was right, if you have a
brand new BMW, are you taking itto Walmart if mechanics get
fixed?
Speaker 1 (29:04):
or auto tune.
Speaker 2 (29:05):
No, no, you're going to take it to the specialist and
, like, for example, state Farm,does do certain types of
insurance Well homeownersinsurance, you know, boating
insurance, stuff of that nature,that is their bread and butter.
They were just like we sell allthese other types of insurance.
Speaker 1 (29:30):
So why not offer life insurance?
And life insurance is not theirmain product?
Crossfitter, but you're superfit, but technically your BMI is
, you know, making you morbidlyobese.
Or maybe you enjoy somecannabis every now and then,
right Like.
You know which companies to goto for those things, whereas you
(29:52):
know maybe the state farms ofthe world are going to deny you.
But you know who to reach outto for specific types of
policies, to where people aregoing to have the best chance of
getting properly insured at aright you know, at a good rate,
etc.
So again, that personalized,nuanced experience you're not
going to get from a robo advisor.
(30:14):
You're not going to get thatfrom going to state farmcom.
No offense to state farm, ifyou want to sponsor the podcast,
let us know, but you know Imean it just is what it is.
And so, again, just going backto that human touch,
understanding goals, nuances,things that are specific to you,
a robo-advisor is not going todo that very well.
Speaker 2 (30:34):
Also, the thing is with a robo-advisor, what
they're really good at is logic,so they are often going to
provide you the most logicalanswer to the question that you
ask it.
I know from personal experiencewithin finance that sometimes
the most logical answer is notthe best answer to actually have
in practice with somebody basedupon their personal
(30:55):
individuality, and you'remarried to me, so you know that
sometimes logic is not theanswer that I choose because it
just is not going to me.
Speaker 1 (30:58):
So you know that sometimes logic is not the
answer that I choose, because itjust is not going to work.
Speaker 2 (31:03):
I always, you know, when I'm talking to clients, I
always say, like you know, morethan likely there's multiple
ways to accomplish a given goal.
Now, for me, if there's amathematical aspect to it me
personally, individually I'mgoing to choose the most logical
mathematical way to go aboutsomething.
So, for example, let's just saydebt pay down, I'm always going
to want to attack, say, thedebt with the highest interest
(31:26):
rate so that we end up payingless technically over the time
period of paying off the debt.
That doesn't always work forsome people.
Some people need those smallwins where they're tackling the
debt with the lowest balance butit might not have the highest
interest rate, so technicallyover the time frame of paying,
tackling the debt with thelowest balance but it might not
have the highest interest rate,so technically over the
timeframe of paying off the debt, they do pay a little bit more.
(31:47):
But this is the way, from anemotional and behavioral
standpoint, that would work forthem to be on board with doing
it and stay on the course, andAI is not going to necessarily
give you that.
Speaker 1 (31:58):
Yeah, is there a way for AI and financial planning
humans to work together?
Speaker 2 (32:05):
Oh yeah, I mean, I personally use AI on a regular
basis within my practice.
We kind of said it earlier.
One of the ways that I use itis within my meetings and so
that I don't have to actuallytake notes myself, because I
used to take notes by hand backin the day which is distracting.
It is and but it's the only waythat I was at the time was the
only way I could get theinformation and I didn't like it
(32:27):
, but like it's what I had to do.
Now I have fathom that I use asmy meeting note taker and I
could be fully engaged in theconversation and it's taking all
the notes for me, and then itcreates my follow-up email with
the uh for the recap and theaction items that need to be
completed before our nextmeeting.
If you want to sponsor thepodcast, yes, does a great job
(32:47):
of that and, once again, when itcomes to analyzing portfolio
construction for clients, 100%use chat, uh, gbt, gpt for that,
all other types of AI, um,because the reality is is that,
once I just said, you have tolearn how to utilize the tool
from a prompt standpoint forwhat you're trying to accomplish
(33:09):
, and it's easier to do thatwhen you have a firm
understanding of the knowledgeof the um subject matter that
you're dealing in.
You know, like someone whodoesn't have the background that
I have is not going to be ableto hop on chat, gbt and recreate
the same things that I do.
You're just not, because youdon't have the knowledge base of
what the feed chat, gpt, andthat knowledge base came from
(33:32):
hours upon hours upon years uponyears of understanding finances
.
Speaker 1 (33:36):
Right, well, so you can use AI.
Speaker 2 (33:54):
Finish the sentence.
You can use AI or robo plannersif, say, you are a 25 year old,
you have a W-2 income, youdon't own a home, you don't have
children, you're not marriedand you just have a little bit
of money that you are looking toinvest outside of your 401k
plan, that you want to open up atraditional IRA and you qualify
to contribute to a traditionalIRA, but you need some help
(34:16):
putting together a portfolio.
Speaker 1 (34:17):
Okay, one thing we didn't talk about are the fees.
Obviously, you're not gettingthis for free, so is there a
range of what you can kind oftypically see.
Speaker 2 (34:26):
I would say that I was seeing maybe anywhere from
like 0.2 to 0.4% of thepercentage of the.
But I can kind of equate it toyou have financial advisors who
will do that in significantlymore, for anywhere from 0.75 to
1.1%.
Speaker 1 (34:48):
Yeah, but even you know again, the internet will
show you that paying somebodyover 20 or 30 years 1% of your
portfolio can cost you hundredsof thousands of dollars.
Speaker 2 (34:57):
So I would say this if you are able to 100%,
completely replicate replicatereplicate the advice,
performance, everything thatcomes with an expert financial
planner who has years ofexperience.
If you can replicate that onyour own, then yeah, obviously
(35:17):
you shouldn't pay a financialadvisor.
You probably should just be oneand do it yourself.
Then yeah, obviously youshouldn't pay a financial
advisor.
You probably should just be oneand do it yourself.
But if you cannot do any ofthat, are you going to pay a
financial advisor?
Yes, but I can guarantee youthat you're going to lose
significantly more money bymaking errors.
Speaker 1 (35:34):
Oh, and time, time and money.
Yes, time and money.
Speaker 2 (35:38):
Because it's not an apples to apples comparison,
because the, you know, thestatement that you just made is
assuming that the person who isinvesting on their own, as the
individual consumer, has all theknowledge and can do all the
things that the financialplanner does yeah, and that's
not the case.
Not the case, yeah like I said,if it is the case, then you are
the point zero, zero, zero, zero.
(35:58):
One percent of the population.
That is not a financial plannerthat knows the information, but
more than likely you work insome aspect of finance.
Like I have yet to meet someonethat has no connection to
working currently in finance orpreviously worked in finance and
is able to do these things.
And even if you work in finance, you can work in completely
different areas because you havepeople that are, you know,
(36:21):
working like derivatives.
You know which is a much morecomplicated financial product,
but they don't work in personalfinance and they also understand
emotional bias still comes intoit, even sometimes when you
know exactly what you'resupposed to do yeah, so you
should work with a humanfinancial planner if.
If none of the things I justpreviously said apply to you,
(36:45):
you have a family, you have abusiness, you have complex
estate planning needs.
Speaker 1 (36:50):
You're preparing for retirement major life changes.
Speaker 2 (36:53):
Honestly, at the end of the day, if you're not a
DIYer, Like a true good DIYer Ifyou're not a true.
Diyer that's going toconsistently keep up with this.
You have the time to do it, youenjoy doing it.
Then you're probably going toget a little bit much, not
probably.
You are going to get much morebang for your buck working with
a good financial planner.
Now remember what I always say.
I always say good becausethere's bad in every industry.
Speaker 1 (37:16):
Yeah.
Speaker 2 (37:17):
But if you find one that works well with you and
your personality, then their youknow, their fee is going to pay
for itself 10 times over.
Speaker 1 (37:25):
I mean, I think, too, what you said earlier about
that accountability, thehandholding, the, actually the
taking action part right, that'ssomething we talked about early
on in 2025 is like this is theyear you should take action.
I mean, we have friends who arefinancially very savvy,
multimillionaires, etc.
And they still, right, likethey don't have wills, they
(37:48):
don't have trust, they don'thave things in place to protect
their assets in the way that youwould want to protect your
assets.
Again, it has nothing to dowith how smart you are.
Sometimes.
It's just a matter of notprioritizing what you know you
should be doing from a timeperspective.
If you work with the Brandonsof the world, you know somebody
(38:08):
that's a good financial planner.
They are going to make surethat you get those things done,
and that could be the differencebetween probate and losing
generational wealth.
I mean Probate and losinggenerational wealth.
Speaker 2 (38:20):
I mean and the thing is too is that you can make a
small error in one given yearand it just builds upon itself
year after year.
So, for example, going back tothe example of talking about
contributing to, say, a Roth IRA, and you actually make too much
money to contribute to a RothIRA, you have to take certain
(38:40):
steps to either take that money,take that contribution back out
, which also does come with apenalty, or you could what's
called recharacterize it into atraditional IRA.
Whatever it may be, if youdon't do that, you are going to
be penalized, and it's not aone-time penalty.
Now, that contribution that'sin there, that should not have
been in there, and it's alsogrowing, you are now going to be
(39:03):
penalized on a daily basis, oh,daily daily until you fix it.
That's just the irs rules andguidelines.
With that that you were goingto be punished like once it,
once you pass the deadline forthe standard time frame to
correct it without any sort ofpenalty.
Once you pass that deadline,that penalty is going to be
(39:23):
assessed daily until you fix it.
So if you don't know that thatissue exists now, imagine you
know 20 years now later yeah, Imean, you never know what you
don't know like you know, say,you say you had, like I said you
had that one year, but thennext year, the year after that,
you realize, oh, you know, Imake too much, I can't do this
again.
You never fixed the firstproblem, wow, and now it's just
(39:43):
compounding.
So, like I said, there's smallthings like that that if you
don't know that and you don'tspecifically put information
like that into these AI tools,you're not going to get the
answer out that you really needto make sure that you're doing
the right thing, and that'swhere advisors come to play, and
that's where advisors come toplay Also too.
For example, if you're workingwith me and I told you to do
something and I was wrong, Ihave E&O insurance.
(40:07):
You can sue me.
So for example I'm just simplystating that if I told you to
contribute to a Roth IRA and youdon't make enough, you made too
much money to contributedirectly to a Roth IRA and you
have that issue.
You could turn around and sueme, so you have a fallback in
regards to if that issue occursWith AI.
(40:27):
You're just SOL.
Speaker 1 (40:36):
Yeah, you got got Got to fix it.
So what would you say are themain takeaways between
robo-advisors working with ahuman?
Do you have any challenges forour listeners today?
What do you want them to do?
Speaker 2 (40:43):
First and foremost, I would say, understanding from a
basic, high level view who youare as a person.
Speaker 1 (40:50):
You said that a lot of times.
Who are you?
Speaker 2 (40:52):
Because everything the way that you go about doing
certain things like, for example, from a financial planning
standpoint it's based onunderstanding, first of all, who
you are as a person, becausethat's the one thing that I'm
trying to understand when I sitdown with a client first who are
you as a person?
Because not the same differentpeople need different things and
they're going to react tothings differently as well.
So understand who you are as aperson.
(41:12):
Are you a diy?
Are you not a diy?
I would say 99 of thepopulation.
I honestly believe that there'sa much smaller percent of the
population that's DIY-er thanwhat people believe.
Speaker 1 (41:23):
Yeah.
Speaker 2 (41:23):
When it comes to their finances, like truly being
able to be a DIY-er.
Speaker 1 (41:27):
But even then, you've chatted with DIY-ers and
there's always something thatthey miss and, honestly, it's
basic.
Speaker 2 (41:35):
Often it's something basic.
I'm like did you look at this?
No, that's the first thing Ifeel like, did you?
Speaker 1 (41:39):
look at this, no, and that's the first thing I feel
like I mean, have you metanybody where you're like, yeah,
they're a true awesome DIYer.
Speaker 2 (41:45):
No.
Speaker 1 (41:47):
Cause I feel like all the conversations we've had, I
mean outside of other financialadvisors.
No, no, no, Like normal people,no yeah.
Speaker 2 (41:55):
Cause you don't have time.
Right, you don't have the time.
Right, you don't have the time.
It's just.
The reality is that you knoweveryone that I've met that says
they're diy, they have a lot ofother things going on in their
life and are they a diy becausethey're trying to save money?
Oh always.
That's the only reason peoplediy yeah that's the only reason
people diy is they want to savemoney, which is, you know, I
understand, because you know me,I'm a frugal person by nature
(42:17):
as well.
But I also realized thatthere's certain areas that make
more sense to maybe not cutcorners and just just for a buck
Um, so are you a DIY or not?
But then there, like I said,there's ways that you can use AI
, but you need to know when touse it and when not to use it,
you know.
So, if you are just simply, ifyou really don't want to have a
(42:37):
conversation about how to investa certain amount of money, you
just want a very simple,straightforward, vanilla way of
investing it, a AI can help youout with that 100%, and it also
can make some things a littlebit easier.
So, like, one of the thingsthat, like I've used the Schwab
portfolio investor with is likedirect indexing.
(43:00):
Now, that's going to go over alot of people's heads, but
that's just me stating thatthere are uses for it.
Speaker 1 (43:07):
I mean, if you're not budgeting or tracking your
spending, maybe a good place tostart with AI in finance would
be to download one of thebudgeting apps and try to get
organized and really understandwell what money is coming out,
what money is coming in.
You know, oh, you're doublepaying for this subscription,
whatever it might be.
You know, it's a good way to goahead and aggregate that
(43:29):
information.
Speaker 2 (43:30):
I think in certain aspects, it can be a learning
tool to help you along the wayto increase your financial
literacy.
So, for example, like if you'rea beginner, hey, I'm a
25-year-old male.
I make approximately thisamount of money.
I am new to investing.
What are the top five books oninvesting you would recommend
(43:53):
that I read?
Love that, or podcasts youshould listen to, or podcasts
yes, it helps tailor theinformation in some aspects if
you know what to put in now.
Like I said once again, ai inof itself is something that you
have to learn and understand howto use, to get better at it and
actually fully utilize it,where I think majority of the
(44:15):
population doesn't do that ordoesn't even care to do it at
this point in time yeah but alsoonce again time all this comes
back to time, like, if you havethe time and you want to utilize
your time this way, hey, morepower to you.
but I could tell you for me, forme personally, even though I do
this for living myself we'rehoping to get to a point,
(44:37):
money-wise, where a lot of thisstuff maybe I you know I'm
overlooking it but handing itoff to somebody else, because
instead of me spending so muchtime doing it, I want to spend
time with my family and my kids.
Speaker 1 (44:49):
Yeah, absolutely so.
Challenge figure out how youcan use AI in your life, if you
have used a robo-advisor of somesort, and whether you had a
great experience or not so greatexperience.
You know, slide in our DMS.
Shoot us an email.
Speaker 2 (45:04):
We'd love to hear all that stuff.
Speaker 1 (45:05):
Yeah, we would love to cause.
Speaker 2 (45:07):
It's just my opinions .
That's like this isn't, youknow, fact-based.
So I'm always open to hearingother people's experiences.
Speaker 1 (45:13):
Yeah, and if it's been a good experience, you know
, certainly let us know.
If you have a Ooh, a horrorstory, maybe let us know.
Speaker 2 (45:20):
Or you know, if you already have a financial advisor
, you know, let us know abouthow that experience far exceeded
anything that AI couldcurrently do for you.
Speaker 1 (45:29):
Yeah, that's a good call out too.
So, all right, hopefully thisconversation was informational,
entertaining, informative allthe things we are glad that
you're listening informative allthe things we are glad that
you're listening.
If you have not yet left us areview, especially on apple or
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It's on every single episode.
(45:50):
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So please take the 35 secondsto leave a written review today,
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Don't forget.
Benjamin Franklin said aninvestment in knowledge pays the
(46:14):
best interest.
You just got paid.
Until next time, and share thisepisode with your friends,
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Speaker 2 (46:21):
Don't forget to connect with us on social media
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Speaker 1 (46:45):
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Speaker 2 (46:56):
Our content is intended to be used, and must be
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It is very important to do yourown analysis before making any
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You should take independentfinancial advice from a licensed
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verify any information you findin our podcast and which you
rely upon, whether for thepurpose of making an investment
decision or otherwise.
In today's episode we are going to discuss if AI will
replace human financialplanners like Brandon Hopefully
not.
We're going to talk about howAI is revolutionizing various
industries, what AI can do infinancial planning, what AI
can't do and why human financialplanners will still matter, and
(00:22):
how AI and humans can worktogether to give the best
experience.
Stay tuned.
Speaker 2 (00:39):
Hey babe, what are we talking about today?
Speaker 1 (00:42):
Today we are venturing into my world a little
bit and we are talking about AI, artificial intelligence, but
not in the technology space thatI'm in for work, but in your
space and financial planning.
Speaker 2 (00:59):
Yeah, are they going to take over my job?
Speaker 1 (01:01):
Right, I think that you know it's so funny because
people are like oh, ai is so new, ai is so new and AI is not new
.
So that's first and foremost.
I know for many people it feelslike it has come out, you know,
in the last year or two, maybethree years, but it's actually
been around for an extremelylong time.
But now it is more accessibleto us, you know, and we're using
(01:25):
it in like the chat, gpt, prepmy meals for the week, write me
a shopping list, plan thisvacation, help me write this
email, kind of way.
But it's actually been aroundfor quite some time.
And so, you know, I think, withthe rise of AI, people very
much are like is AI going totake my job?
And what I typically say is AIis not likely to take most
(01:51):
people's jobs, but it could verywell replace you if you're not
willing to learn about it.
Speaker 2 (01:57):
Yeah, I definitely remember reading a lot of
articles, you know, a few yearsago, when the rise of
robo-advisors started to comeout and it was like you know,
robo-advisors are going to takeover the roles of financial
advisors.
They can do it for cheaper,they're smarter.
All these things and I canhonestly say, you know, a few
(02:18):
years into this, hasn't affectedme and it hasn't affected, you
know, other colleagues that Ihave that are within the field,
because I think that there hasbeen a shift in regards to maybe
what our primary focus and whatour main offering may be, but
as far as replacing us, overall,not at all.
And personally I use AI withinmy practice to help become more
(02:42):
efficient and help in certainaspects that obviously AI can do
significantly better than anyhuman.
Speaker 1 (02:48):
Yeah, one of my favorite uses for AI and I do
this almost daily is recordingall of my work calls, and then,
you know, I get a transcript, Iget next steps, I get follow-up
items.
I mean all of the stuff thatyou do in work that's very
manual, you know, can, can beutilized with technology to make
(03:10):
life easier.
It's also great, you know, inthose instances, hey, if I'm out
and I need to revisit a callthat I wasn't a part of or you
know for you I know you'vetalked about you know recording,
helping it summarize the call,getting the next steps, getting
action items I mean those thingsare the manual tasks that are
(03:33):
very labor-intensive, that takeup a lot of time, and so AI has
a lot of use cases for that.
For that I don't know that Iwould have ever leaned towards a
robo-advisor, but I think I've,of course, am biased because I
know how much you do for notonly our family but for your
clients, and you're just notgoing to get that from a machine
(03:54):
.
You're just not.
Speaker 2 (03:56):
I also.
You know, just like you.
One of the things you said thatI say that I do is I do record
my meetings with clients and allmy clients get a detailed recap
meeting email with action items, and I use a program called
Fathom in order to produce those.
It makes my life significantlyeasier because before I was
taking notes and then creatingthe email myself, as compared to
(04:18):
now, it creates it for me.
I maybe make a few adjustmentsin there and then I send it out.
So cuts down on the timing thatit takes for me to do these
things.
But I think people have adifferent idea of what a
financial advisor a goodfinancial advisor brings to the
table in comparison to what arobo-advisor can do for you.
Speaker 1 (04:41):
Well, do we want to start with what AI can do in?
Speaker 2 (04:46):
financial planning yes.
Speaker 1 (04:47):
Because there are positives.
This is not us knocking AI,because obviously we use it
every day.
Speaker 2 (04:53):
So, when it comes to the investing aspect, as far as
putting together a portfolio, Ithink AI can do a significantly
better job, and a lot ofadvisors are using AI to put
together portfolios Because,basically, when it comes to
putting together a portfolio andanalyzing, hey, how should we
put this portfolio togetherbased upon this person's goals,
their risk tolerance and whatthey're looking to achieve, a
(05:15):
lot of that is based uponhistorical performance.
You may have heard the saying.
Like you know, historicalperformance is not indicative of
future performance, but that'sall we have really to look at in
order to maybe have an idea ofwhat's going to happen in the
future.
And obviously, ai can do asignificantly better and much
faster job of analyzinghistorical performance than any
(05:37):
human or any number of humansput together.
So, from a portfolio managementstandpoint, you have AI.
That's being incorporated intopretty much almost any platform
for that.
Speaker 1 (05:46):
But aren't you also able to utilize that for your
clients, oh?
Speaker 2 (05:51):
100% Right.
So the thing that I think Ihave a better edge on when I'm
using it, as compared to, maybe,a client using it by themselves
, is that any technology thatyou're using, if you have a
better understanding of thesubject matter and what you're
using that technology for, youare going to be able to use the
technology better.
So think about it this way Ifyou were in high school and you
(06:13):
were in math class, all right,and you have a math test and you
have a calculator, you have acalculator that can help you do
all the calculations, but youhave no idea which equation you
need in order to solve theproblem.
It doesn't matter if you havethe calculator there, you don't
know what equation applies tothe problem that you're trying
to solve.
Speaker 1 (06:31):
So you don't even know what to like chemistry
class.
Speaker 2 (06:34):
So you don't even know which calculator.
You don't even know whichinformation you need to put into
the calculator.
Even though you have the toolthat can provide you with the
answers, you don't know what toput into it in order to get out
the answer that you need.
Speaker 1 (06:45):
Yeah, that's a really good call out.
Even you know.
Again, I think most peoplelistening probably have tinkered
once or twice with chat, gpt.
But it's all about the prompt.
If you put in a garbage prompt,guess what Garbage in, garbage
out.
So it's the same concept of youhave to know how to utilize the
tool, you have to know how toprompt the engine.
You have to understand thatit's training and learning from
(07:09):
you.
If you are not utilizing itcorrectly, then it's not being
trained correctly and you'renever going to get the best
possible outcome.
Speaker 2 (07:17):
That even goes back to conversations we've had about
using LegalZoom to create awill.
The issue that you run intothere is that it's based upon
the information that you put in.
Now, you might be puttinginformation in and you might be
putting the wrong information.
However, it's actually givingyou the correct information for
what you put in.
Speaker 1 (07:40):
Have you been listening to our podcast and
wondering how am I really doingwith my money?
Am I doing the right thingswith my investments?
Am I on track to reach myfinancial goals?
What could I be doing better?
If you answered yes to any ofthese questions, then it's time
for you to reach out to Brandonto schedule your free yes, I
said free 30-minute introductionconversation to see how his
(08:03):
services could help make you themore confident moneymaker we
know you could be.
What are you waiting for?
It's literally free and at thevery least, you'll walk away
feeling more empowered andconfident about your financial
future.
Link is in our show notes.
Go, schedule your call today.
Yeah, but now that we are goingthrough that pre-nup, post-nup
(08:26):
process right for legal Zoom, etcetera, et cetera we've had
those conversations of, likecheap can be expensive, right,
You're going to Staples buyingthe DIY kit out of the box,
You're printing it offline.
Even the other night we werewatching Love is Blind and she
had printed off the prenuppapers and put them down and
said you know, here you go,which clearly that was not a
(08:49):
collaborative process.
But again, what are you puttingin and what are you going to
get out?
So you think you're doing theright thing, but who knows what
you actually are getting in,that legally kind of binding
contract.
It's certainly not the best itcould be.
Speaker 2 (09:02):
I think another thing that AI does a really great job
is there's tons of differentbudgeting apps.
So essentially what a lot ofthese apps are?
Account aggregators.
You put in information for thedifferent accounts you have.
You know your bank account,credit card, whatever savings
account, whatever it may be, andit's able to pull in all the
information from thetransactions, categorize them
(09:22):
and give you some insights toyour spending habits.
I think obviously AI is greatfor that, because the only other
way to track that is manuallyand that's looking at your
statements at the end of eachmonth and maybe putting into a
spreadsheet and doing all thathard work, which obviously some
people love doing it, and that'syou know.
If spreadsheets are your jam,be my guest, not my jam.
(09:42):
I much rather work smarter, notharder.
Speaker 1 (09:44):
Well, and everybody's living on their phone.
So the reality is is most of uswould probably want to check
our budgets and our spending onour phone, because it's our
little pocket computer and soit's right there.
Do you have any favorites nowthat mint is gone favorites.
Speaker 2 (10:06):
Now that mint is gone um, mint became I want to say
became monarch money?
Speaker 1 (10:08):
no, it became.
I think it became monarchpeople are raving about monarch.
Speaker 2 (10:10):
I don't think it's free.
Speaker 1 (10:10):
It's not free but people love the interface.
They love that it's.
It's really great kind of rightout of the box, but you can
also customize it for your needsand the u UI UX is fantastic.
I've heard nothing but goodthings.
Speaker 2 (10:22):
Yeah, I haven't used it personally since it became
monarch money, since I haveplanning software that I can use
for that that I already pay for.
Speaker 1 (10:30):
We're not trying to have multiple subscriptions for
the same thing.
Speaker 2 (10:33):
But even in those scenarios like so, for example
with the account aggregation andcategorizing of transactions,
Sometimes AI doesn't get thecategorization correct.
Speaker 1 (10:43):
Right.
Speaker 2 (10:44):
And you have to go back in and do it manually.
But the nice thing is that itlearns and it recognizes, when
the new transaction comes in,where it should go.
But there is still some humanaspect to checking to make sure
that things are done correctlyand not just simply relying that
the AI technology is at 100percent.
Speaker 1 (11:00):
Right.
Even we've had to do that inyour planning software
RightCapital where, I don't know, maybe like CVS was shopping
and we know that it's pharmacybenefits because we're not
shopping at CVS type thing.
So you have to put a little bitof work in to get it to where
you want it to be.
But then it will work for youand it will learn and as you
train it it will get better.
And it will learn and as youtrain it it will get better.
Speaker 2 (11:23):
And one other way that people are using it, which
really I wouldn't say isapplicable to most of the
population, is algorithmicinvesting.
So that's going to be like someof the people that are doing
the trading day trading andthey're looking at you know
times to buy, sell stuff of thatnature.
Now, obviously, that doesn'tnecessarily apply to most people
, but it analyzes patterns andit does a much better job of
(11:46):
analyzing patterns than you know, a single individual could do.
And that's another way that AIis definitely being used and can
be beneficial.
Speaker 1 (11:52):
Yeah.
Are there any other ways thatyou feel like AI has a benefit
in the financial planning world?
Speaker 2 (12:00):
Honestly, I mean other than maybe some of the
back office stuff, when it comesto paperwork being done and
stuff of that nature, yeah,those jobs could potentially be
downsides, because I don't thinkthey're going to be eliminated
only because you do have to havesomebody to manage, obviously,
the technology itself to makesure things are still done
correctly.
But I definitely see from thatstandpoint like transactional
(12:21):
standpoint.
But the main thing you knowfrom a client facing interaction
that I would have, I would sayit's more or less the investing
aspects of the portfoliomanagement, stuff like that.
Speaker 1 (12:33):
Yeah.
So if we're thinking AI roboadvisors right, everybody online
is like, you can do it yourself.
You don't need to pay somebodyand like yes again, if you want
to spend hours and hours andweeks and weeks and months and
months learning proper financialplanning, all the rules, the
tax implications, you know, andthen, on top of that, you know
(12:56):
the checkups, we have an entireepisode on DIYing your finances
and all the things you're goingto have to consider.
But most people again, this isnot where you spend your time,
so you will miss things.
So, talking about therobo-advisor, you know, is the
robo-advisor going to ask you toupdate your beneficiaries after
you go through the divorce?
Is the robo-advisor going totell you to up your life
(13:18):
insurance now that you have kidsor you bought a bigger house or
you got a new job and you'remaking $200,000 more?
Is the robo-advisor going tohelp you really make the most
out of the comprehensiveportfolio and all of the life
stuff?
I feel like the life stuff iswhat's so important that you
(13:38):
don't want to miss out on.
Speaker 2 (13:39):
Yeah, I mean there is a draw to the Betterments
Wellfronts, schwab, intelligentPortfolios and the main draw to
that for most people, in allhonesty, comes down to cost.
That's.
The reality of it is that Ithink people are trying to find
the least expensive solution,and I completely understand
wanting to make sure that you'renot overpaying and being cost
(14:01):
conscious.
However, cheap isn't always thebest option.
Speaker 1 (14:08):
Cheap can be expensive.
Speaker 2 (14:10):
And, at the end of the day, that's what this is,
and the thing is, too, is that Ithink it's also there is full
financial planning andinvestment management are not
the same.
Now, investment management canbe part of financial planning,
but investment management is notfull financial planning.
Speaker 1 (14:28):
Can you expand on that?
Speaker 2 (14:29):
Yes.
So with investment management,all someone is doing is saying,
for example, like you have$100,000.
You want to invest it in themarket.
It might ask you some questionsaround risk tolerance, which is
a questionnaire that I give topeople to just simply understand
how they manage risk, how theyreact to risk.
It's not the by all meansindeterminate factor of how
(14:50):
we're going to invest, but it'ssomething that we can have a
conversation about Now with arobo-advisor.
It is, by all means, going tobe the end result.
So, for example, you might besomeone that wants to be
aggressive, but once you gothrough the risk questionnaire,
you end up becoming conservative, and with most robo advisors,
they're going to justautomatically put you into a
conservative as compared toworking with me.
Now we have a basis for aconversation.
(15:11):
Why did you answer thequestions this way?
Did you understand thequestions?
And then maybe we might have aI have a conversation that leads
you a better understanding ofwhy we should be more aggressive
.
Thus we can now become, youknow, invest in a more
aggressive manner.
As compared to a robo-advisor,it's really not going to have
that back-to-back interactionand that explaining factor that
comes along with it.
Now, what it's going to do issimply, you know, taking that
(15:33):
risk assessment how long do youapproximately want to be
invested in the market someaspect, because that's also
going to be a determining factorof how aggressive you can be
and then it puts together aportfolio for you, so it just
simply manages the money thatyou gave it.
So you hopped online, you had$100,000, you put it into the
robo-advisor and they invest itfor you.
(15:54):
Now the one thing they're notgoing to do is make sure hey, do
you have an emergency fund setup?
Can you actually invest allthis $100,000?
Or would it be maybe better ifyou invested half of this
$100,000 because you don't havean adequate emergency fund?
Also, they didn't ask youquestions about any other goals
that you maybe want to achieve.
Oh, by the way, you want to buya house in the next two years.
Maybe you don't invest theentire $100,000 so that you have
(16:16):
a down payment for the home.
It doesn't ask you all thosequestions.
It's a very basic,straightforward kind of like.
If you're going to be a DIYer,it helps out.
Or if you're someone that'smaybe just getting started in
investing, it can help you outas far as doing that, but it's
not full financial planning atall.
It is strictly investmentmanagement.
You give it the money, itmanages it.
(16:37):
It doesn't ask you any otherquestions.
Speaker 1 (16:39):
Yeah, and I know you're so big on goals and what
you say.
It drives me crazy.
But I obviously understand whyyou say this all the time when
people ask you questions andyour response is it depends.
It depends.
And, like you said, shouldeverybody max out their 401k?
It depends.
What are your goals?
Are you going to need to bemore liquid?
Do you?
Are you saving for that downpayment on the home, whatever
(17:02):
that might be?
Like you said, the robo advisorfor lack of a better word is not
going to give you that humantouch of conversation to really
dig into what are your goals?
What do you want your money todo for you?
How do you envision your lifeinto 5, 10, 20 years, etc.
So I think those are theconversations that really I mean
(17:24):
, you're great at them butreally help people understand.
Oh, these are why we're makingthe decisions we're making.
When you were talking about,you know, plugging in your money
, talking about your, maybe yourretirement age, it reminded me
of our 401k episode where wetalked about the target date
fund and like, yeah, maybe ifyou're auto-enrolled and you
don't do anything, you'll beokay.
(17:45):
But then we talked about myspecific 401k, which is more
aggressive than what the targetdate fund would have provided,
because we know we're nottouching that money.
We know that this is along-term play, so let's be as
aggressive as possible, becauseI'm 20 years away from
quote-unquote or 25 years awayfrom quote-unquote retirement
(18:05):
age, so let's maximize thoseyears.
Speaker 2 (18:07):
I think so that with the robo-advisors they're also
going to basically operate kindof on the rule of thumb rather
than the nuance.
Speaker 1 (18:15):
And so much is nuanced right with people's
situations.
It's personal finance Right.
With people's situation.
Speaker 2 (18:18):
It's personal finance .
Speaker 1 (18:19):
Yeah.
Speaker 2 (18:20):
So you know, rule of thumbs don't always work for
everybody at a given time.
So the biggest thing with it,too, is that you're going.
You also don't get this aspectof, for example we were
literally talking about theother day.
There's a lot of rules in placethat people can easily get
(18:41):
confused.
So, for example, one of thethings that I don't see enough
of on social media, I believe,is that with IRAs, individual
retirement accounts if you justhopped on social media, you
would think that everyone couldtake advantage of a traditional
IRA and the sense of puttingmoney away pre-tax.
So when you put money into theIRA at the end of the year, when
(19:01):
you file your taxes, you'reletting them know that you put,
say, $7,000 into an IRA and thatlowers your taxable income for
the year by $7,000 because it'sgoing in pre-tax.
So they think that they couldjust all take advantage of that
pre-tax contribution.
Speaker 1 (19:14):
That's what the internet says, so it's got to be
real.
Speaker 2 (19:16):
No.
Once you exceed a certainincome threshold, you cannot
deduct that contribution in anIRA.
Speaker 1 (19:26):
So you can't just to be clear, because we had a long
discussion about this you canput that $7,000 in the IRA.
That is absolutely go put thataway.
If you have it, you know, letit sit there, let it grow.
But what Brandon is saying isyou, if you are high earner, you
(19:47):
might not be able to get thetax benefit which is really why
people want to put that money inthe IRA.
Speaker 2 (19:51):
I mean there's other benefits to it.
Because, um, I mean there areother benefits to it, but not in
the same fashion as if you wereable to take the deduction,
because there was different waysthat I would go.
There's a different way that Iuse it for for clients that we
don't need to get into here, butyou would have the internet,
would have, you think, theneveryone can do that deduction
and it's stuff like that.
When it comes to the littlespecific rules or, like you know
(20:12):
, with contributions to a RothIRA, if you make a certain
amount of money, you can'tcontribute directly to a Roth
IRA.
You have to do a differentprocess.
And it's those little ruleswhere, like, if you don't know
them, I don't know if AI isgoing to give that answer to you
, because it's based upon whatyou put in and how you prompt it
.
Speaker 1 (20:28):
Yeah, well, and I think, too, what you're kind of
alluding to is it really isgoing back to like the goals of
what you want your money to dofor you, because money is a tool
.
So also, I think you have somany conversations about the
emotional aspect right Of money,and you're you have these
(20:48):
conversations all the time andyou're always joking around
saying like I should have gottena psychology degree, because so
we all have an emotionalattachment to our money.
We all want to do what'simportant to us with our money,
and so I feel, like you, you doa lot of handholding and
reassuring with your clients tolet them know, hey, we've
planned for this.
Or you're, you're good, go, youknow, get that nice closet
(21:13):
install.
Or go get that bathroom remodel.
Or yeah, you can afford thesecond lake house, like I feel
like you are constantlyreminding people of like hey,
we've done this work and nowyou're actually in a position to
spend the money the way we'veplanned for it.
Go, do that, it's okay.
Speaker 2 (21:29):
I mean, there's so many things in life that we know
that we should do and it's notjust within finance.
For example, your health.
You should need a bunch ofunhealthy food, you should
exercise.
We all know these things, butwhy don't we do them?
Speaker 1 (21:42):
Because there's nobody holding us accountable.
We don't have a partner.
Buddy workout accomplice.
We have to get over our headtrash.
Speaker 2 (21:49):
We have to deal with, you know, maybe past traumas.
Speaker 1 (21:52):
So much.
Speaker 2 (21:52):
And understand a financial literacy like you know
, a lacking of understanding ofcertain things.
There's so many things that gointo making a decision and then
taking action, and it hasnothing to do with the black and
white numbers.
Speaker 1 (22:07):
Yeah, and you help move people along with that
decision making, with theactions that need to be taken.
I don't know that AI is goingto build you a to-do list of
what to do, and even if it does,it doesn't make you do it,
right, right.
And even if it does, it doesn'tmake you do it, right, right.
Speaker 2 (22:20):
So, like it's not, ai is not going to constantly call
you and send you emails andremind you of your goals that
you were, you know you want toaccomplish and make sure that
you get these things done.
Yeah, Because if it was simple,as you knowing, you needed to
know the information in order todo something AI doesn't need to
help you.
We had, you still have theinternet.
You can still look things up.
You could have been alreadydoing that.
So if you're someone that has ahard time with actually
(22:42):
completing stuff, it doesn'tmatter what AI does until they
get to the point where AI canliterally be a second version of
you.
That does it.
Yeah, it doesn't matter.
You know you're not.
You have to take the action.
And also, the thing is, too, isthat we always talk about what
the financial planning aspect is.
It's not a one time thing, it'scontinuous.
So you're going to keepcontinuing to revisit the plan,
(23:06):
continuously, monitoring thingsin your life.
What's changing, what haschanged in my life that now is
going to alter the plan.
Like you know, if you'resomebody that has, you know
you're married, have two kidsand that's all you planned on
having.
I have my plan in place.
Oops, have two kids, that's allyou planned on having.
I have my plan in place.
Da da, da da.
Oops, I didn't get a vasectomy.
Now we have a third kid and wehave friends.
Speaker 1 (23:26):
We all know where babies come from.
Speaker 2 (23:27):
That has happened too , where they didn't necessarily
plan to have three kids, butthey're happy they have them,
but it changes the plan.
My point is is that you'regoing to always have to
constantly change things andsometimes you might have had
something changed in your lifeand you, by yourself as an
individual, aren't going back torevisit a plan that was based
upon different parameters,whereas as your advisor, I'm
constantly following up with youhey, what's going on new in
(23:50):
your life?
And even giving some promptssometimes, because sometimes
people are like, oh no,nothing's new.
Well, you know, job's still thesame.
You know, still making the sameincome, da, da, da, stuff like
that.
Speaker 1 (23:58):
Oh no, I got a promotion and da, da, da, da, da
, right the prompt memory is asfar as like what has actually
happened.
Speaker 2 (24:05):
Ai doesn't do that.
Speaker 1 (24:10):
Yeah, I think one of the other things you know
talking about that emotionalaspect of finance is I mean, you
have clients where somethingwill happen right In this
climate.
Something's constantlyhappening in the news and we can
can't even keep up and we'rejust being flooded with like
information, misinformation, andyou're having to decipher like,
oh my gosh, should I bepanicking right now?
So I feel like you also havethat.
(24:31):
You, you often say that you'rekind of the stop, the stop sign
between your clients and baddecisions, Whereas, like, if
you're just kind of pluggingthings into a robo advisor,
they're not going to say, hey,don't forget, this is a 20 year
plan.
We're not going to panic, we'renot going to move money, You're
not going to start storing itin a shoe box under your bed,
(24:53):
Like it will be okay.
Speaker 2 (24:55):
I'm the wall between them and doing something stupid.
Yeah, and at that I'm notsaying my clients are stupid,
because my clients are extremelybrilliant people in so many
different ways and way smarterthan me in a lot of aspects.
Speaker 1 (25:05):
But even this.
Speaker 2 (25:07):
Yes even the smartest people that thoroughly
understand the plan that we areworking on, they have great
financial literacy, they stillare emotional human beings and
you have an emotional attachmentto your own money.
So, even though you know hey, Iknow this information from a
black and white standpoint, butthis is what I'm feeling I have
(25:29):
those conversations often withclients to be like to bring them
back down, talk them off theledge and also just reinstill
confidence and the plan that wehad put in place and we talked
through.
And often it's sometimes justme listening to what's going
through their head, because Idon't want to just simply say to
someone don't worry about it,because that doesn't work.
(25:50):
It doesn't work that way.
I need to really listen to themand understand what it is that
is worrying them and just have aconversation, human to human,
human, to maybe help not maybeeliminate all their you know
fear or emotions that are goingon at that moment, but to lessen
them and kind of bring themback to the logical side of
(26:10):
thinking when it comes tocertain things yeah, what about
the like ethical fiduciaryresponsibilities?
Speaker 1 (26:18):
I mean, I feel like I'm sure you're signing your
life away.
You know you're going to clickthat like accept terms and
conditions that nobody reads butwe probably should.
And then something goes wrongand you're like oh wait, I
didn't mean to do that.
And they're going to be likecool, bro, you did it and you
clicked accept conditions, likewhat about that kind of stuff
(26:40):
where people might make bigmistakes that cost them a lot of
money?
Speaker 2 (26:45):
Well, I can say from the fiduciary standpoint for
example, a lot of these AIproducts are specific to the
financial institution thatyou're working with.
You know, and at the end of theday, that financial institution
is trying to make money.
So, even though they're tryingto help you out, bottom line is
that they're trying to makemoney, stay in business, make
(27:06):
money, make their shareholderswealthy.
So, ultimately, at the end ofthe day, some of the things that
they may suggest, the thingsthat they may do, aren't always
necessarily putting you first.
It's going to be putting thecompany first.
Whereas I'm not beholden to aspecific company, the only quote
, unquote company I'm beholdento is my own company, and the
basis of my own company is to dowhat's best for my clients.
Speaker 1 (27:27):
Well, and that's why you went independent to begin
with because, that way, you canuse whatever company you want
for whatever products are needed, without having to feel like,
oh, I can only you knowprescribe you Fidelity products
or only Schwab products or onlywhatever.
Like now you can go anywhereand make sure that your clients
are getting the best product,the best price, etc.
(27:49):
I feel like that was one ofyour really big motivators in
opening up your own planningfirm.
Speaker 2 (27:55):
Yeah, because when you're utilizing just one
company, then, like you said,like you're not maybe using a
full tool belt.
You only have a few selecttools.
When I switched to beingindependent, I could have an
entire tool belt plus sometoolbox tool shed everything.
Speaker 1 (28:13):
Well, I feel like, too, one of the things that
comes up often is like lifeinsurance right.
So if you're, yeah, you can getlife insurance through State
Farm, but you're going to getState Farm life insurance right,
so do you're yeah, you can getlife insurance through State
Farm, but you're?
Speaker 2 (28:26):
going to get State Farm life insurance right, so do
they have.
Well, you just made a face,well, the thing is all right.
So I'm not saying if you haveState.
Speaker 1 (28:31):
Farm life insurance.
Speaker 2 (28:31):
That's great.
It's better than having nothing.
I am of the mindset where youcan't do everything great.
Mm-hmm I don't think of lifeinsurance in State Farm.
Speaker 1 (28:38):
Walmart has everything.
Walmart doesn't do any likeWalmart doesn't like.
Speaker 2 (28:41):
Walmart has everything.
Walmart doesn't do everything?
Great, they do everything.
Okay, now, granted, obviouslythe company makes a ton of money
.
Speaker 1 (28:50):
We're not gonna even go there, but but I think I
would prefer do you think thebest mechanics work at Walmart?
Speaker 2 (28:57):
I'm just saying like if I was right, if you have a
brand new BMW, are you taking itto Walmart if mechanics get
fixed?
Speaker 1 (29:04):
or auto tune.
Speaker 2 (29:05):
No, no, you're going to take it to the specialist and
, like, for example, state Farm,does do certain types of
insurance Well homeownersinsurance, you know, boating
insurance, stuff of that nature,that is their bread and butter.
They were just like we sell allthese other types of insurance.
Speaker 1 (29:30):
So why not offer life insurance?
And life insurance is not theirmain product?
Crossfitter, but you're superfit, but technically your BMI is
, you know, making you morbidlyobese.
Or maybe you enjoy somecannabis every now and then,
right Like.
You know which companies to goto for those things, whereas you
(29:52):
know maybe the state farms ofthe world are going to deny you.
But you know who to reach outto for specific types of
policies, to where people aregoing to have the best chance of
getting properly insured at aright you know, at a good rate,
etc.
So again, that personalized,nuanced experience you're not
going to get from a robo advisor.
(30:14):
You're not going to get thatfrom going to state farmcom.
No offense to state farm, ifyou want to sponsor the podcast,
let us know, but you know Imean it just is what it is.
And so, again, just going backto that human touch,
understanding goals, nuances,things that are specific to you,
a robo-advisor is not going todo that very well.
Speaker 2 (30:34):
Also, the thing is with a robo-advisor, what
they're really good at is logic,so they are often going to
provide you the most logicalanswer to the question that you
ask it.
I know from personal experiencewithin finance that sometimes
the most logical answer is notthe best answer to actually have
in practice with somebody basedupon their personal
(30:55):
individuality, and you'remarried to me, so you know that
sometimes logic is not theanswer that I choose because it
just is not going to me.
Speaker 1 (30:58):
So you know that sometimes logic is not the
answer that I choose, because itjust is not going to work.
Speaker 2 (31:03):
I always, you know, when I'm talking to clients, I
always say, like you know, morethan likely there's multiple
ways to accomplish a given goal.
Now, for me, if there's amathematical aspect to it me
personally, individually I'mgoing to choose the most logical
mathematical way to go aboutsomething.
So, for example, let's just saydebt pay down, I'm always going
to want to attack, say, thedebt with the highest interest
(31:26):
rate so that we end up payingless technically over the time
period of paying off the debt.
That doesn't always work forsome people.
Some people need those smallwins where they're tackling the
debt with the lowest balance butit might not have the highest
interest rate, so technicallyover the time frame of paying,
tackling the debt with thelowest balance but it might not
have the highest interest rate,so technically over the
timeframe of paying off the debt, they do pay a little bit more.
(31:47):
But this is the way, from anemotional and behavioral
standpoint, that would work forthem to be on board with doing
it and stay on the course, andAI is not going to necessarily
give you that.
Speaker 1 (31:58):
Yeah, is there a way for AI and financial planning
humans to work together?
Speaker 2 (32:05):
Oh yeah, I mean, I personally use AI on a regular
basis within my practice.
We kind of said it earlier.
One of the ways that I use itis within my meetings and so
that I don't have to actuallytake notes myself, because I
used to take notes by hand backin the day which is distracting.
It is and but it's the only waythat I was at the time was the
only way I could get theinformation and I didn't like it
(32:27):
, but like it's what I had to do.
Now I have fathom that I use asmy meeting note taker and I
could be fully engaged in theconversation and it's taking all
the notes for me, and then itcreates my follow-up email with
the uh for the recap and theaction items that need to be
completed before our nextmeeting.
If you want to sponsor thepodcast, yes, does a great job
(32:47):
of that and, once again, when itcomes to analyzing portfolio
construction for clients, 100%use chat, uh, gbt, gpt for that,
all other types of AI, um,because the reality is is that,
once I just said, you have tolearn how to utilize the tool
from a prompt standpoint forwhat you're trying to accomplish
(33:09):
, and it's easier to do thatwhen you have a firm
understanding of the knowledgeof the um subject matter that
you're dealing in.
You know, like someone whodoesn't have the background that
I have is not going to be ableto hop on chat, gbt and recreate
the same things that I do.
You're just not, because youdon't have the knowledge base of
what the feed chat, gpt, andthat knowledge base came from
(33:32):
hours upon hours upon years uponyears of understanding finances
.
Speaker 1 (33:36):
Right, well, so you can use AI.
Speaker 2 (33:54):
Finish the sentence.
You can use AI or robo plannersif, say, you are a 25 year old,
you have a W-2 income, youdon't own a home, you don't have
children, you're not marriedand you just have a little bit
of money that you are looking toinvest outside of your 401k
plan, that you want to open up atraditional IRA and you qualify
to contribute to a traditionalIRA, but you need some help
(34:16):
putting together a portfolio.
Speaker 1 (34:17):
Okay, one thing we didn't talk about are the fees.
Obviously, you're not gettingthis for free, so is there a
range of what you can kind oftypically see.
Speaker 2 (34:26):
I would say that I was seeing maybe anywhere from
like 0.2 to 0.4% of thepercentage of the.
But I can kind of equate it toyou have financial advisors who
will do that in significantlymore, for anywhere from 0.75 to
1.1%.
Speaker 1 (34:48):
Yeah, but even you know again, the internet will
show you that paying somebodyover 20 or 30 years 1% of your
portfolio can cost you hundredsof thousands of dollars.
Speaker 2 (34:57):
So I would say this if you are able to 100%,
completely replicate replicatereplicate the advice,
performance, everything thatcomes with an expert financial
planner who has years ofexperience.
If you can replicate that onyour own, then yeah, obviously
(35:17):
you shouldn't pay a financialadvisor.
You probably should just be oneand do it yourself.
Then yeah, obviously youshouldn't pay a financial
advisor.
You probably should just be oneand do it yourself.
But if you cannot do any ofthat, are you going to pay a
financial advisor?
Yes, but I can guarantee youthat you're going to lose
significantly more money bymaking errors.
Speaker 1 (35:34):
Oh, and time, time and money.
Yes, time and money.
Speaker 2 (35:38):
Because it's not an apples to apples comparison,
because the, you know, thestatement that you just made is
assuming that the person who isinvesting on their own, as the
individual consumer, has all theknowledge and can do all the
things that the financialplanner does yeah, and that's
not the case.
Not the case, yeah like I said,if it is the case, then you are
the point zero, zero, zero, zero.
(35:58):
One percent of the population.
That is not a financial plannerthat knows the information, but
more than likely you work insome aspect of finance.
Like I have yet to meet someonethat has no connection to
working currently in finance orpreviously worked in finance and
is able to do these things.
And even if you work in finance, you can work in completely
different areas because you havepeople that are, you know,
(36:21):
working like derivatives.
You know which is a much morecomplicated financial product,
but they don't work in personalfinance and they also understand
emotional bias still comes intoit, even sometimes when you
know exactly what you'resupposed to do yeah, so you
should work with a humanfinancial planner if.
If none of the things I justpreviously said apply to you,
(36:45):
you have a family, you have abusiness, you have complex
estate planning needs.
Speaker 1 (36:50):
You're preparing for retirement major life changes.
Speaker 2 (36:53):
Honestly, at the end of the day, if you're not a
DIYer, Like a true good DIYer Ifyou're not a true.
Diyer that's going toconsistently keep up with this.
You have the time to do it, youenjoy doing it.
Then you're probably going toget a little bit much, not
probably.
You are going to get much morebang for your buck working with
a good financial planner.
Now remember what I always say.
I always say good becausethere's bad in every industry.
Speaker 1 (37:16):
Yeah.
Speaker 2 (37:17):
But if you find one that works well with you and
your personality, then their youknow, their fee is going to pay
for itself 10 times over.
Speaker 1 (37:25):
I mean, I think, too, what you said earlier about
that accountability, thehandholding, the, actually the
taking action part right, that'ssomething we talked about early
on in 2025 is like this is theyear you should take action.
I mean, we have friends who arefinancially very savvy,
multimillionaires, etc.
And they still, right, likethey don't have wills, they
(37:48):
don't have trust, they don'thave things in place to protect
their assets in the way that youwould want to protect your
assets.
Again, it has nothing to dowith how smart you are.
Sometimes.
It's just a matter of notprioritizing what you know you
should be doing from a timeperspective.
If you work with the Brandonsof the world, you know somebody
(38:08):
that's a good financial planner.
They are going to make surethat you get those things done,
and that could be the differencebetween probate and losing
generational wealth.
I mean Probate and losinggenerational wealth.
Speaker 2 (38:20):
I mean and the thing is too is that you can make a
small error in one given yearand it just builds upon itself
year after year.
So, for example, going back tothe example of talking about
contributing to, say, a Roth IRA, and you actually make too much
money to contribute to a RothIRA, you have to take certain
(38:40):
steps to either take that money,take that contribution back out
, which also does come with apenalty, or you could what's
called recharacterize it into atraditional IRA.
Whatever it may be, if youdon't do that, you are going to
be penalized, and it's not aone-time penalty.
Now, that contribution that'sin there, that should not have
been in there, and it's alsogrowing, you are now going to be
(39:03):
penalized on a daily basis, oh,daily daily until you fix it.
That's just the irs rules andguidelines.
With that that you were goingto be punished like once it,
once you pass the deadline forthe standard time frame to
correct it without any sort ofpenalty.
Once you pass that deadline,that penalty is going to be
(39:23):
assessed daily until you fix it.
So if you don't know that thatissue exists now, imagine you
know 20 years now later yeah, Imean, you never know what you
don't know like you know, say,you say you had, like I said you
had that one year, but thennext year, the year after that,
you realize, oh, you know, Imake too much, I can't do this
again.
You never fixed the firstproblem, wow, and now it's just
(39:43):
compounding.
So, like I said, there's smallthings like that that if you
don't know that and you don'tspecifically put information
like that into these AI tools,you're not going to get the
answer out that you really needto make sure that you're doing
the right thing, and that'swhere advisors come to play, and
that's where advisors come toplay Also too.
For example, if you're workingwith me and I told you to do
something and I was wrong, Ihave E&O insurance.
(40:07):
You can sue me.
So for example I'm just simplystating that if I told you to
contribute to a Roth IRA and youdon't make enough, you made too
much money to contributedirectly to a Roth IRA and you
have that issue.
You could turn around and sueme, so you have a fallback in
regards to if that issue occursWith AI.
(40:27):
You're just SOL.
Speaker 1 (40:36):
Yeah, you got got Got to fix it.
So what would you say are themain takeaways between
robo-advisors working with ahuman?
Do you have any challenges forour listeners today?
What do you want them to do?
Speaker 2 (40:43):
First and foremost, I would say, understanding from a
basic, high level view who youare as a person.
Speaker 1 (40:50):
You said that a lot of times.
Who are you?
Speaker 2 (40:52):
Because everything the way that you go about doing
certain things like, for example, from a financial planning
standpoint it's based onunderstanding, first of all, who
you are as a person, becausethat's the one thing that I'm
trying to understand when I sitdown with a client first who are
you as a person?
Because not the same differentpeople need different things and
they're going to react tothings differently as well.
So understand who you are as aperson.
(41:12):
Are you a diy?
Are you not a diy?
I would say 99 of thepopulation.
I honestly believe that there'sa much smaller percent of the
population that's DIY-er thanwhat people believe.
Speaker 1 (41:23):
Yeah.
Speaker 2 (41:23):
When it comes to their finances, like truly being
able to be a DIY-er.
Speaker 1 (41:27):
But even then, you've chatted with DIY-ers and
there's always something thatthey miss and, honestly, it's
basic.
Speaker 2 (41:35):
Often it's something basic.
I'm like did you look at this?
No, that's the first thing Ifeel like, did you?
Speaker 1 (41:39):
look at this, no, and that's the first thing I feel
like I mean, have you metanybody where you're like, yeah,
they're a true awesome DIYer.
Speaker 2 (41:45):
No.
Speaker 1 (41:47):
Cause I feel like all the conversations we've had, I
mean outside of other financialadvisors.
No, no, no, Like normal people,no yeah.
Speaker 2 (41:55):
Cause you don't have time.
Right, you don't have the time.
Right, you don't have the time.
It's just.
The reality is that you knoweveryone that I've met that says
they're diy, they have a lot ofother things going on in their
life and are they a diy becausethey're trying to save money?
Oh always.
That's the only reason peoplediy yeah that's the only reason
people diy is they want to savemoney, which is, you know, I
understand, because you know me,I'm a frugal person by nature
(42:17):
as well.
But I also realized thatthere's certain areas that make
more sense to maybe not cutcorners and just just for a buck
Um, so are you a DIY or not?
But then there, like I said,there's ways that you can use AI
, but you need to know when touse it and when not to use it,
you know.
So, if you are just simply, ifyou really don't want to have a
(42:37):
conversation about how to investa certain amount of money, you
just want a very simple,straightforward, vanilla way of
investing it, a AI can help youout with that 100%, and it also
can make some things a littlebit easier.
So, like, one of the thingsthat, like I've used the Schwab
portfolio investor with is likedirect indexing.
(43:00):
Now, that's going to go over alot of people's heads, but
that's just me stating thatthere are uses for it.
Speaker 1 (43:07):
I mean, if you're not budgeting or tracking your
spending, maybe a good place tostart with AI in finance would
be to download one of thebudgeting apps and try to get
organized and really understandwell what money is coming out,
what money is coming in.
You know, oh, you're doublepaying for this subscription,
whatever it might be.
You know, it's a good way to goahead and aggregate that
(43:29):
information.
Speaker 2 (43:30):
I think in certain aspects, it can be a learning
tool to help you along the wayto increase your financial
literacy.
So, for example, like if you'rea beginner, hey, I'm a
25-year-old male.
I make approximately thisamount of money.
I am new to investing.
What are the top five books oninvesting you would recommend
(43:53):
that I read?
Love that, or podcasts youshould listen to, or podcasts
yes, it helps tailor theinformation in some aspects if
you know what to put in now.
Like I said once again, ai inof itself is something that you
have to learn and understand howto use, to get better at it and
actually fully utilize it,where I think majority of the
(44:15):
population doesn't do that ordoesn't even care to do it at
this point in time yeah but alsoonce again time all this comes
back to time, like, if you havethe time and you want to utilize
your time this way, hey, morepower to you.
but I could tell you for me, forme personally, even though I do
this for living myself we'rehoping to get to a point,
(44:37):
money-wise, where a lot of thisstuff maybe I you know I'm
overlooking it but handing itoff to somebody else, because
instead of me spending so muchtime doing it, I want to spend
time with my family and my kids.
Speaker 1 (44:49):
Yeah, absolutely so.
Challenge figure out how youcan use AI in your life, if you
have used a robo-advisor of somesort, and whether you had a
great experience or not so greatexperience.
You know, slide in our DMS.
Shoot us an email.
Speaker 2 (45:04):
We'd love to hear all that stuff.
Speaker 1 (45:05):
Yeah, we would love to cause.
Speaker 2 (45:07):
It's just my opinions .
That's like this isn't, youknow, fact-based.
So I'm always open to hearingother people's experiences.
Speaker 1 (45:13):
Yeah, and if it's been a good experience, you know
, certainly let us know.
If you have a Ooh, a horrorstory, maybe let us know.
Speaker 2 (45:20):
Or you know, if you already have a financial advisor
, you know, let us know abouthow that experience far exceeded
anything that AI couldcurrently do for you.
Speaker 1 (45:29):
Yeah, that's a good call out too.
So, all right, hopefully thisconversation was informational,
entertaining, informative allthe things we are glad that
you're listening informative allthe things we are glad that
you're listening.
If you have not yet left us areview, especially on apple or
spotify, please do that.
I know we put it in everynewsletter.
It's on every single episode.
(45:50):
We talk about it all the time.
But you leaving a writtenreview on apple helps us get our
podcast in front of otherpeople, and that is is what we
are working very, very hard for.
So please take the 35 secondsto leave a written review today,
if you haven't already.
We appreciate you and we'lltalk to you soon.
Don't forget.
Benjamin Franklin said aninvestment in knowledge pays the
(46:14):
best interest.
You just got paid.
Until next time, and share thisepisode with your friends,
family and extended network.
Speaker 2 (46:21):
Don't forget to connect with us on social media
at the sugar daddy podcast.
Speaker 1 (46:45):
You can also email us your questions you want us to
answer for our past the sugarsegments at the sugar daddy
podcast at gmailcom or leave usa voicemail through our
Instagram.
Speaker 2 (46:56):
Our content is intended to be used, and must be
used, for informationalpurposes only.
It is very important to do yourown analysis before making any
investment, based upon your ownpersonal circumstances.
You should take independentfinancial advice from a licensed
professional in connection with, or independently research and
verify any information you findin our podcast and which you
rely upon, whether for thepurpose of making an investment
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