Will AI Make Financial Advisors Obsolete?
Will AI replace financial advisors?
Short answer: no. But advisors who use AI will replace the ones who don't.
My grandfather started in this business in 1972. He used to tell advisors that their reputation had to be so clean they should squeak when they walk. He said that long before anybody had heard of artificial intelligence, and it's still the truest thing I know about this business. The number one thing your financial advisor needs to be is someone you can trust.
We've heard the "advisors are finished" talk before. Before I got into this business, advisors were worried E-Trade was going to take over. When I started 20 years ago, robo-advisors were all the rage. Those things changed the business. They didn't replace good advisors.
Now it's AI. It's bigger and faster than anything that came before it, so it's a fair question. Let's talk about it.
AI won't take your job. Someone using AI will.
People in every industry are worried AI is going to take their job. Treasury Secretary Scott Bessent put it this way: "AI is not going to take your job. Someone who knows how to use AI is going to take your job."
That's exactly what we're seeing in our industry.
Not long ago, a client asked me if I was making myself obsolete. We offer strategies that use machine learning and artificial intelligence to help uncover great investment opportunities for our clients. Wasn't I working myself out of a job?
I told them, "I'm not making myself obsolete. I'm making my competition obsolete."
Can ChatGPT replace a financial advisor?
If you ask an AI chatbot to help you pick stocks, take a look at where it's getting its answers. A lot of the time, it's Reddit and random X posts. How do you know any of that is trustworthy? You don't.
I actually tested this. I asked one of the popular chatbots to go back a year, ignore anything newer than that, and tell me which stocks it would have recommended. Then I checked how those picks did. Let's just say I wasn't tempted to hand it our clients' money.
Don't get me wrong. AI makes us faster. On a complicated plan, I might go through 40 rounds of edits with it. But it takes a professional to know when AI is hallucinating. And it takes experience to know the right questions to ask.
Here's a real example.
The $268,000 question
We had a client who sold some inherited mineral rights. She expected to owe $375,000 in capital gains taxes, and she was ready to write the check.
We pushed back. We asked her and her CPA to dig into the stepped-up basis from the inheritance. It made a big difference. Her tax bill dropped to $107,000.
That's $268,000 she got to keep. The math wasn't the hard part. Knowing which question to ask was. That's what real tax planning looks like.
How we actually use AI
Most advisors I talk to are still using AI like it's Google. They type in a question and read the answer. That's fine, but it's barely scratching the surface.
Here's how we use AI in wealth management at Deupree James:
We used Claude to help us write Python code that automates work that used to take us several days every month.
It helps us move faster on investment due diligence and ongoing monitoring.
It speeds up our tax transition analysis. When a new client brings us a portfolio, we can figure out how to move it over without an unnecessary tax bill.
It powers parts of our investment strategies, helping us uncover opportunities we might otherwise miss.
If you want to see behind the curtain, I recorded a short video on what we're doing with AI and why.
Autopilot, with a pilot in the seat
I always compare it to an airplane on autopilot. I'm happy to let the autopilot fly the plane. But I still want a human at the controls.
We compare everything the machines recommend against human analyst recommendations. If our analysts disagree with the machine, we override it. That's the thinking behind our Focus 10 strategy. You can see how it works in the Focus 10 fact sheet.
So what does all this buy us? Time. Time we get to spend with our clients instead of buried in spreadsheets.
What a machine will never know about you
We take the time to get to know our clients and their backstory. What they're afraid of. What they're worried might happen to them.
A client told me once that when she was a little girl, her dad wouldn't let her order a Coke at Burger King. She always had to get water, to save money. So when the market's going down and she's scared she won't be able to afford a nice dinner, I know where that's coming from. It's a core memory. I understand the fear, and I can speak to it.
A chatbot doesn't know that story. And it's not going to call her on a bad day in the market and walk her through it.
Everyone has a plan until they get punched in the face
Mike Tyson said that, and he was right. Everybody has a plan. But a plan's not worth the paper it's written on if you don't follow it.
That's where a good advisor earns their keep. We hold you accountable. We help take the emotion out of it, especially when you face your first bear market.
When a client wants to do something against our advice, we ask them to sign a piece of paper acknowledging that. It's amazing how often that makes people step back and reconsider.
So who should be worried?
Two kinds of advisors.
First, advisors who won't adopt AI. Their competition is going to do better work, faster, and spend more time explaining their valuable retirement plans with clients. That gap is only going to grow.
Second, advisors who only sell products, like life insurance. Their clients are going to be sitting across the table from them with a supercomputer at their fingertips. A sales pitch won't hold up to that. A real plan will.
The future of financial advisors in the age of AI
For years, financial advisors have called themselves the quarterback of their clients' financial lives. I think AI is finally going to let us live up to that.
Clients want somebody who's thinking about how a decision hits their tax return, their portfolio, and their family. The best advisors are going to use AI the way we do: to speed up due diligence, investment analysis, review prep, and follow-ups.
Then they'll use that time to serve clients the way clients have always wanted to be served.
Robo-advisor vs. financial advisor: "Isn't a robo-advisor cheaper?"
Sure it is. A robo-advisor costs a fraction of a percent, and ChatGPT is free. But that's only looking at cost. It's not looking at benefit.
Here's what the robo-advisor years taught us. People are happy to use a robo-advisor when there's not much money on the line. But when they build real wealth, they want real advice. They want tax planning. They want access to private investments and lending. And they want someone who knows their whole story and can make it all work together.
And honestly, most people are busy living their lives. They don't want to become experts in taxes, estate planning, and portfolio management. They shouldn't have to.
It's kind of like fixing your car. I could probably get AI to walk me through it. But it's going to take me a lot longer, and my mechanic is going to do a better job, faster.
Where to start
E-Trade didn't make good advisors obsolete. Robo-advisors didn't either and neither will AI. The tools will keep changing, but what matters most won't. My grandfather was right: find someone whose reputation is so clean they squeak when they walk.
Most advisors are happy to meet with you for free and show you what they do. Take them up on it.
At Deupree James Wealth Management in Shreveport, Louisiana, we offer a free Retirement Tax Leak Analysis. We'll look at where your portfolio is losing money to taxes. Remember that $268,000? That's the kind of thing we're looking for.
If you'd like one, reach out to us here. We'd love to talk.
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