Hottest AI Use Case For Advisors: Note-Taking Apps That Generate Action Items

Charles Paikert US Correspondent New York June 20, 2024

Hottest AI Use Case For Advisors: Note-Taking Apps That Generate Action Items

Our US correspondent gets into the details of AI and the use cases that it has, or may have, for the wealth management, banking and family offices sector. A rapidly-evolving field, this article flags a range of important themes.

Geoffrey Hinton, the computer scientist known as the “Godfather of Artificial Intelligence,” recently warned us on 60 Minutes that he was quite worried that AI is likely to become more intelligent than humans and “might take over” the world. 

Ray Kurzweil, the famous futurist, says when children born today are in kindergarten, it’s probable that AI will have surpassed humans “at all cognitive tasks,” ushering in the new era of artificial general intelligence.

Well, in the meantime, a not very scary but extremely practical and time-saving AI app is taking the financial advisory industry by storm: software that transcribes and summarizes meeting notes with clients and then feeds action items into CRM applications for implementation.

Note-taking/action item apps have become the most popular “use case” in artificial intelligence among financial advisors to date, according to Josh Brown, CEO of Ritholz Wealth Management, who recently moderated a panel discussion on AI hosted by the Museum of American Finance and Betterment. 

“It’s a massive scaling proposition,” Brown said. Industry guru Michael Kitces, co-founder of the XY Planning Network and publisher of the Kitces Report, said he “fully agrees” with Brown’s assessment. In just a few months, using AI for meeting notes has become “a hugely valuable resource for us,” said Tony Blagrove, CEO of Traveka Wealth.

Venture capital funding pouring in
Indeed, the AI note-taking/action item app phenomenon has exploded in just the last six months. None of the most popular of these apps, including Jump, Zocks, Grain and Finmate AI were even cited in the 2024 T3/Inside Information Advisor Software Survey, released at the T3 conference in Las Vegas in January.

Since then dozens of startups have begun releasing AI note taking app “assistants” – and attracting major venture capital investments. 

Earlier this month Jump announced a $4.6 million funding round led by Sorenson Ventures that also included Pelion Venture Partners and several angel investors. In February, Zocks raised $5.5 million in seed funding from Light Speed Venture Partners, according to CEO Mark Gilbert, a former executive with Twilio, the San Francisco cloud communications company.

In general, the AI note-taking/action item assistant apps record client conversations, transcribe them and produce summaries, task lists and compliance records which can be integrated with Zoom, Microsoft, Google and CRM applications such as Salesforce, Redtail and Wealthbox.

Each product has its own unique features, of course, and XYPN recently posted an excellent description, ranking and comparison of the leading apps, listing pros and cons and price points, which range from fees of approximately $39 to over $100 a month per advisor.

Cutting post-meeting time by 70 per cent
Noting that financial advisors can spend up to an hour after each client meeting entering notes into their CRM, summarizing the meeting and generating team action items, John O’Connell, CEO of tech consultant The Oasis Group, estimates that AI note-taking apps can save advisors as much as 70 per cent of that time.

Not surprisingly, advisors have responded enthusiastically. 

After trying “quite a few” AI note-taking apps, Mike Reynolds, principal of Elevation Financial in suburban Indianapolis, said that after using Jump for the past four months he has been able to be “more present in client meetings,” not worrying about missing something important, resulting in a “better experience for the client.”

Zocks user Katie Lindfelt, a financial planner with Sequoia Wealth Advisors in San Jose, California, said the app was “very easy to get started” and has allowed team members to “clearly share notes, properly take action and follow up.”

Although the AI note-taking app Fathom is not designed specifically for financial advisory firms, Silicon Valley-based Blagrove likes the fact that Fathom works well with Salesforce and was highly rated as an approved vendor by Zoom. “The biggest value prop,” he said, “is its ability to document everything that was said and what we do, allowing us to demonstrate our value and justify our fees.”

Caveats led by data security and privacy 
There are, of course, caveats.

Apparently, most of the apps can’t be used to record phone conversations and require using either a Zoom-type connection for virtual meetings or a connection with a laptop computer or speaker phone for in-person meetings.

As with any AI product, human oversight is required to check for accuracy, and the software’s ability to clearly recognize and distinguish individual voices may not be perfect.

But data security and privacy are the biggest concerns by far.

“Confidential client information is being recorded,” Blagrove noted. “It’s like inviting a stranger into a personal meeting. You need to be sure there is data integrity and security and verify and the vendor’s audited security policies.”

Blagrove recommends that advisory firms get a Silicon Valley due diligence staple before signing a contract: a Systems and Organization Controls 2 (SOC 2) report, an independent assessment of a vendor’s ability to securely manage client data, issued by a CPA or another independent third-party auditor.

“Many software agreements favor the service provider when outlining data security and the use of your client’s data,” O’Connell pointed out.

Cloud, compliance and longevity
“The data needs to be secured in a private cloud,” said T3 president Joel Bruckenstein, one of the financial industry’s leading tech consultants. “But I’m concerned that small firms may not be able to ask the right questions. If they don’t fully understand how the data is being used, they shouldn’t be using these apps.”

In fact, O’Connell said Oasis has found that larger advisory firms are not implementing the AI apps “while they research the compliance and cybersecurity issues associated with these solutions.”

Bruckenstein pointed out that AI software is still “a very immature market,” which he compares to the robo-advisor market that emerged a decade ago. “Two-thirds of the robo companies were disintermediated by incumbents and aren’t around anymore,” he said.

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