The Pluses of Using AI for Wealth Management
An experiment in using AI not for answers, but to ask better, more human questions about money.
There are perils to using artificial intelligence (AI) for wealth management. I discussed some of these drawbacks in my previous blog. But that doesn’t mean AI is of no use in this arena.
As of today, AI can’t replace your wealth manager - but it can enhance your relationship in ways that empower you to make better decisions and communicate more effectively with everyone impacted by those decisions.
That may sound like a big promise. How can AI do that?
AI can help you communicate better with your wealth manager about the topics that matter most to you.
AI can provide a second opinion on elements of your strategy, such as your portfolio or estate plan, giving you a springboard for a more robust conversation with your advisor.
AI can help you understand complex financial topics that form the foundation of your financial plan, making discussions with your financial advisor more productive.
AI can help you broach sensitive financial conversations with clarity and grace.
The best way to appreciate AI’s power is to go ahead and give it a try. I encourage you to experiment with some of your own specifics. I have created a profile of a couple whose challenges resemble many of the clients I counseled in my 30 years as a wealth manager.
Greg Baker is 62 and his wife, Sharon, is 50. They’ve been married 15 years. Each has two children from a prior marriage. Greg’s children are in their 30s, married, with three kids under age 5. Sharon’s children are single in their early 20s.
Greg and Sharon want to retire sooner rather than later, but they’re nervous about having enough money. They own a $750,000 paid-for home, hold $2.5 million in retirement accounts, $100,000 in a Health Savings Account, and $1.5 million in a taxable investment account. Their advisor has them invested in a globally diversified portfolio - 65% equities, 35% cash and U.S. Treasuries - almost entirely in low-cost exchange-traded funds (ETFs). They anticipate needing $15,000 a month to live their retirement dream.
Most of their accounts are in Greg’s name; he has been the primary wealth accumulator. Sharon comes from an affluent family. Her 85-year-old father has told her she’ll receive a “sizable inheritance.” She’s reluctant to ask him how much.
I plugged Greg and Sharon’s situation into AI and asked a series of questions. Overall, the answers were remarkably well considered and helpful. If you want to see more than the summary of my findings, you can click the associated links to read the full text of the AI responses.
Preparing for a Wealth Manager Meeting
Bakers’ Question:
We’re about to meet with our financial advisor. We want to know if our portfolio is suitable for people like us, hoping to retire within five years. We don’t even know what questions to ask. We don’t trust a second opinion, because we fear another advisor will just tell us what we want to hear to get our business.
AI’s Answer:
AI generated thoughtful questions to help the Bakers clarify their retirement goals - essential for any financial projection. It also suggested questions to ask their advisor about retirement income and investment strategies. AI even offered to run independent projections and stress tests.
The problem? Based on mistakes I have uncovered in previous experiments, I wouldn’t be confident in AI’s projections just yet. But the questions themselves were excellent. (You can read the AI’s full response here)
Obtaining a Second Opinion
Bakers’ Question:
We would like to retire sooner rather than later, and certainly no later than five years from now. What is a suitable portfolio for us? We understand that time, not money, is our scarcest resource, and we are willing to cut our expenses to $12,000 a month if it means we can retire sooner. Knowing that we can live on less, does it change your portfolio recommendations for us?
AI’s Answer:
AI offered a reasonable second opinion. It noted that a lower spending target improves their odds of retiring early. It suggested a more conservative allocation, listed specific low-cost ETFs, and highlighted some tax-saving strategies.
Would I recommend following AI’s portfolio recommendation directly? No. AI’s portfolio is a good start, and like all portfolios, has advantages and disadvantages. But it’s an excellent starting point for a thoughtful conversation with their advisor.
Understanding a Complex Topic
Bakers’ Question:
We’re worried about growing old and not having enough money for care. We’ve considered long-term care insurance, but it’s very expensive. Do we have enough savings to cover costs on our own? Are there alternatives? Please review our options and recommend a solution.
AI’s Answer:
AI helped them frame the issue. It noted that 70% of people over 65 will need long-term care, usually for fewer than five years. It showed the Bakers they could likely cover the need from their assets, though an extended need might strain resources. It reviewed two insurance options, outlined pros and cons, explored other funding sources, and made a specific recommendation.
AI’s recommendation gave the Bakers a structured way to engage their advisor in a meaningful discussion on this complicated issue. (Click here to see the detailed breakdown from the AI.)
Tackling a Sensitive Discussion
Sharon Baker’s Question:
My dad told me I’ll receive a “sizable inheritance,” but I don’t know what that means. Can you help me figure out how to ask the amount without sounding greedy? Knowing this information would help Greg and I plan our future.
AI’s Answer:
AI crafted emotionally intelligent scripts for Sharon. One framed the conversation around responsibility and estate planning. Another took a more direct - but emotionally riskier - approach. It even drafted potential responses from her father and ways Sharon could reply. It considered the pros and cons of different approaches, and recommended how she should proceed.
In short, AI helped Sharon prepare for a sensitive, high-stakes conversation with thoughtfulness and tact. (See the exact scripts and conversation paths the AI suggested in the full document.)
The Bottom Line
AI is not yet ready to replace your financial advisor. But it is an incredibly powerful tool that can help you:
ask sharper questions
weigh tradeoffs
explore complex topics
handle delicate conversations
Used wisely, AI can make you a better partner to your advisor - and a better steward of your wealth.
Have you used AI to help make financial decisions or enhance conversations with your advisor? I’d love to hear your experience - the good, the bad, and the ugly.
Until our next conversation,
David
Small Steps & Worthy Questions
Am I open to using new tools like AI to challenge assumptions and uncover blind spots in my financial planning?
What topics in my financial life feel too complex or intimidating, and could AI help me unpack them?
How could AI make my conversations with my spouse, family, or advisor more productive? Test AI’s ability by experimenting with scripting a sensitive money conversation with a family member.
Use AI to draft three questions for your next meeting with your wealth manager.
Run a “second opinion” check on one element of your financial plan—and bring the results to your advisor for review.
If you love this, share it with your friends, foes, and even perfect strangers. Let’s change the way America thinks about money.
LinkedIn | Facebook | Instagram | X / Twitter | Bluesky