Chat, should my clients be sending you their account statements?

ChatGPT will now let some users link their personal bank accounts to the software, rolling out a suite of personal finance tools for paid users of its Pro service, OpenAI announced last week. Some of those tools include a dashboard of their portfolio and payments, as well as a function that lets users ask personalized questions about their specific financial situations. More than 200 million people already come to the platform every month with questions about their investments, the company said in a statement. It’s a major foray into the world of finance for one of the most valuable private companies in the world.

While the tools may be useful for newcomers who don’t have an advisor or want a broad financial plan, they might not be helpful to advised clients with more complicated financial plans, said Chris Maudlin, senior wealth advisor at AlphaCore Wealth Advisory. “[The ChatGPT tool] is great from a very basic budgeting and planning standpoint,” he said. “But it will always fail from a complex needs [standpoint].”

PhAIsing It In

Many advisors agree LLMs are great for some clients who want to access quick and simple financial information, but they have concerns about advisors’ fiduciary duty and compliance responsibilities when an AI is in the driver’s seat. “If someone got bad advice, would they sue OpenAI?” said Andrew Herzog, a CFP with the Watchman Group. He added that giving advice requires having some skin in the game. “You go out on a limb and take a calculated risk to build a business around financial advice because you believe you can responsibly direct your fellow man. AI couldn’t care less.”

Still, if AI is wading into finance, then finance is diving into AI. Rick Wurster, CEO of Charles Schwab, said last week that AI could soon be used to address clients with less than $1 million in assets. And in April, Citi released its own AI client assistant tool named Sky. AI in investment management will evolve through three stages, said Tal Schwartz, CEO & Founder of Ai Funds, whose proprietary model, BAILA, has been serving as an investment strategist since 2019. These stages include:

• Insights. Here, AI produces research, market commentary and summaries that advisors read and apply.
• Assistant. The AI assistant works as a co-pilot, drafting client communications and making recommendations, while humans still make the final calls.
• Strategist. At this level, AI can serve as the investment strategist itself, reading market conditions and constructing portfolios from scratch.

Assisted AI Living. Most of what is being rolled out today lives in stages one and two, Schwartz said, in the world of so-called “AI-assisted” advising. Regardless of what some advisors might think about the capacity of AI to give sound advice, however, it appears there is demand: 90% of Gen Z users found AI-generated financial advice to be worthwhile or profitable, according to a recent survey.

“This is the natural evolution,” Schwartz said. “AI is becoming pervasive in wealth management, and over time, AI-managed strategies will manage a meaningful share of global AUM.”

Additional reporting by Griffin Kelly.

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Fintech and custodian Altruist plans to launch its own affiliate RIA model, a move that could deepen its relationship with advisors, while pushing into territory traditionally occupied by legacy firms like Charles Schwab, Fidelity and Pershing. The program is designed for advisors who want independence without having to deal with the costs and intricacies of running their own businesses. It also gives advisors a new affiliate option as the advisor flight to independence hits new highs. “Strategically, it’s a brilliant move,” said Louis Diamond, CEO of Diamond Consultants. “We’re seeing a massive shift in advisors who don’t want to start their own RIA.”

Altruist’s approach is more direct than those of bigger players, Diamond said. Affiliate programs at the major custodians technically run through groups including NewEdge Wealth, Private Advisor Group or Sanctuary Wealth. “This is different in that it’s the custodian itself that’s going to be the RIA,” he said.

Take a Load Off

Altruist Advisors, which is set to launch broadly in the fall, would take care of compliance operations, and under the 1099 structure, advisors would be considered representatives of Altruist, but still own their client relationships and operate their own brands. Altruist has had to turn away thousands of advisors because it didn’t offer an RIA model, said company COO Mazi Bahadori. “They want to be an independent advisor … but they just don’t want to deal with all the hassles of running a business,” he told Advisor Upside. “So the timing certainly made sense.”

The program comes after a banner 2025 for the independent channel:

• The channel had the largest number of advisor moves last year, gaining more than 9,400 professionals, according to Diamond Consultants data.
• LPL Financial’s acquisition of Commonwealth actually caused many of the larger independent firms to raise their transition deals, heightening movement in the channel.

Break Free. The affiliate model can be attractive, especially to breakaway advisors with small to mid-size books who are new to the independent channel. Many prefer to outsource responsibilities from compliance and regulatory filings to payroll and cybersecurity. “I see this constantly with advisors in their 30s who want to go out on their own, but can’t justify the overhead,” said Jeffrey Judge, managing partner at Chesapeake Financial Planners. “The downside: You’re building on someone else’s platform. If Altruist’s priorities shift, yours shift with them.”

Altruist’s new model also raises concerns about potential conflicts of interests, Judge said. Could it lead to a situation in which affiliated advisors are prioritized over outside RIAs that just use Altruist for custody? “It’s theoretical [but] if affiliated advisors start getting better pricing or tools, the ‘platform for everyone’ story falls apart,” he said.

There’s a whole bunch of money changing hands in the coming years, but how can advisors help their clients who have inherited their parents’ wealth?

Much ado has been made about the Great Wealth Transfer, the roughly $124 trillion estimated to change hands over the coming decade as the Baby Boomers retire and pass on their wealth to Gen Xers and millennials. About a third of wealthy families have already begun the transfer process, according to a UBS poll. But the broader shift has only just begun, said Shannon Spotswood, CEO of RFG Advisory, particularly when that figure is expanded to include businesses still owned by Boomers. It’s a major opportunity for advisors that has been talked about for decades, but is now actually taking place.

“We’re maybe in the bottom of the first inning,” she said. “I don’t think we’ve seen the full effect [of] a third of the wealth already making its move.”

One Step Ahead

While inheritances are changing hands, it’s difficult to know just how much since it’s such a slow-going process, said Dave Alison, president of wealth management at Prosperity Capital Advisors. Rather than one big event where parents pass away and “the kids get a check,” families are increasingly engaging in proactive planning, so that the next generation knows what to expect. This is how it should be, he added, since families who don’t plan ahead experience “a shock to the system.” “The money shows up at the worst possible moment emotionally, and the heirs are processing grief and a major financial event at the same time,” he said.

Experts said the most important things advisors should have their clients do post-transfer are:

• Update their estate plan with the new assets added in, as well as the beneficiaries.
• Reorganize their overall financial plan, as well as their tax plan, particularly if the client inherits an individual retirement account.
• Reconfigure their investment profiles to match their time horizons and risk tolerance, since older clients tend to have more conservative portfolios.

Stay a While. Keep in mind that when a client dies, inherited assets often leave the firm soon after. An advisor may have worked with a client for 20 years, only to see a spouse or children move those assets elsewhere within months. “That’s why it’s so important to build relationships with as many family members as possible while everyone is still around,” said Cohen Taylor, a behavioral wealth specialist with Mission Wealth. She encourages married couples to attend client meetings together and works with clients’ adult children on early financial education and college planning.

Another way to help the next generation and keep assets in house is to encourage clients to pass on those assets sooner, said Dave Pulcini, CEO of SixPoint Financial Partners. Pulcini, who also has a podcast and YouTube series, said one of his most popular videos focused on how parents can gift funds now, so they can see their children enjoy it.

“I don’t need $6 million when I’m 75 and inheriting it, right?” Pulcini said. “A lot of folks want a gift while they’re alive.”

Additional reporting by Griffin Kelly.