The AI agents are here.

For years, the name of the game for AI in wealth management has centered on efficiency: capturing client data, drafting emails, summarizing meetings and organizing files. But that’s starting to shift. Wealthtech firms are now pushing artificial intelligence beyond administrative support and into decision-making assistance, using client data to generate insights and map out potential financial paths.

Citi and Savvy Wealth both recently announced AI-driven tools aimed at guiding advisors and clients. While the technology is evolving quickly, the underlying reality hasn’t changed: Advisors who effectively integrate these tools into their workflow will have a significant advantage. “An expert with a tool can build a work of art,” said Jason Pereira, a CFP with Woodgate Financial. “An amateur with that same tool can build maybe something of value, or maybe something that falls apart.”

Reach for the Sky

Citi’s Sky is a client-facing assistant that summarizes financial data and answers basic planning or market-related questions. It includes an AI avatar (a somewhat uncanny woman in business attire with a bob haircut) functioning essentially as a chatbot with an optional visual layer. The system is intentionally limited, said Joe Bonanno, Citi’s head of wealth intelligence. “When questions involve nuanced trade‑offs, major financial changes or require tailored recommendations, Citi Sky is designed to elevate those moments by encouraging deeper engagement with a financial advisor,” he told Advisor Upside.

One of the clearest use cases for Sky is managing client anxiety:

• Advisors often spend large portions of volatile market days responding to worried clients, even when the appropriate advice is simply to stay the course.
• Tools like Sky could absorb some of that volume.

“A 70-year-old panicking about portfolio volatility won’t find calm just because an avatar sounds friendly,” said Will Trout, director of securities and investments at Datos Insights. “But they might be willing to ask a question they’d normally hesitate to ask their advisor, and they might ask it at midnight when the advisor isn’t available.”

Let Your Garden Grow. On the advisor end, Savvy Wealth’s Savvy Intelligence aggregates client data and allows advisors to run what-if scenarios, like, “What happens if my clients retire at 62 instead of 65 and start Roth conversions now?” or “Show me the tax impact of selling concentrated positions this year vs. spreading it over three years.” Wealth managers are meant to treat Savvy Intelligence like a team of analysts who already know your client, said Ritik Malhotra, company founder. “The advisor is driving the scenario, applies their judgment and decides what goes to the client. The AI handles the technical modeling and assembly underneath,” he told Advisor Upside.

Still, adoption remains the key variable. Trout noted that these systems only deliver value if advisors trust them and integrate them naturally into their workflow. “If [the system] feels bolted-on or unreliable, it dies on the vine,” he told Advisor Upside. “But if it becomes second nature, it compounds advisor power and shifts what advisors can accomplish in each client meeting.”

Active ETFs have firmly established themselves as the cool, new kids on the block, with asset managers launching nearly 1,000 products last year alone. While registered investment advisors still rely heavily on passive funds for their low costs and diversification, many are increasingly incorporating active ETFs into portfolios, and a few firms are standing out.

JPMorgan is king, issuing three of the top five active funds preferred among RIAs, and that concentration is reflective of a wider trend across firms. “The list is dominated by relatively few asset managers, indicating that brand familiarity and established advisor relationships remain key drivers of adoption in the active ETF market,” said Rich Donnellan, vice president of marketing at data firm Fintrx.

And the Winner Is …

Active ETF adoption has surged, especially among independent RIAs. In early 2021, these advisors held about $28 billion in active ETFs. By the end of last year, that figure had climbed to nearly $400 billion, according to Fintrx.

The types of strategies advisors favor help explain that growth. RIAs tend to gravitate toward active ETFs focused on income generation, cash management and tax-efficient core exposures. These align with ongoing client demand for yield, liquidity and diversified long-term portfolios. Fintrx data shared with Advisor Upside showed that the top five most popular active ETFs among all RIAs, include:

• JPMorgan Equity Premium Income ETF (JEPI) — Some 1,200 RIAs have allocated a combined $14.5 billion to the fund.
• JPMorgan Ultra-Short Income ETF (JPST) — Nearly 1,050 firms hold about $20.5 billion in assets.
• Dimensional US Core Equity 2 ETF (DFAC) — Just over 1,000 RIAs account for roughly $30 billion of the fund’s AUM.
• Avantis US Small Cap Value ETF (AVUV) — Around 860 firms have invested a combined $12.5 billion.
• JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) — More than 800 RIAs have committed $7.7 billion to the fund.

Not So Fast. Active ETFs may be gaining ground with RIAs, but plenty of advisors still remain cautious as the funds tend to underperform their passive counterparts over long periods. “We do use active ETFs, but very selectively,” said Sean Beznicki, director of investments at VLP Financial Advisors. “We’re not going out and ‘shopping’ the ETF universe from scratch.” His firm typically allocates to ETF share classes built from mutual funds it’s already vetted and used for years. “It gives us a bit more confidence sticking with what’s familiar, while still picking up the added benefits of the ETF structure,” he told Advisor Upside.

Do you even crypto, bro? That may soon be a question facing investors using 401(k) accounts to save for retirement.

Last month, the Department of Labor proposed regulations that provide broad legal protections for the selection of investment options within tax-qualified retirement plans, so long as the plan’s fiduciaries follow a prudent and well-documented process detailed in the proposal. While they apply to the selection of any investment option, much of the early response to the regulations has focused on their potential to facilitate access to cryptocurrencies and private assets. To Jamie Hopkins, CEO of Bryn Mawr Trust Advisors and chief wealth officer at Bryn Mawr Trust, that’s both an exciting and concerning proposition.

The DOL’s move signals growing mainstream acceptance of digital assets, he said. It also raises new questions for retirement and estate planning, as many investors are unprepared for the unique planning challenges these asset classes introduce. Ultimately, Hopkins predicted, financial advisors will need to play a central role in helping plan fiduciaries and participants deploy novel investment options. He recently sat down with Advisor Upside to talk through these dynamics.

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