Rich People Don't Talk to Robots

How is it possible that I still need to explain this?

Good morning from the T3 Conference in Las Vegas, Nevada. A few hundred of the most successful executives in wealth tech are here this week to talk about the products and services they’re building for financial advisors all over America. Everyone is here. This is the 20th anniversary of the event and the founder, Joel Bruckenstein, should be very pleased with the turnout - not just in terms of quantity but the quality of the crowd.

It should come as no surprise that the buzzword of the event this year is AI. People are very excited, and with good reason. There is a shortage of talent in the financial advisory space - one that will persist throughout the course of the decade as the number of wealthy people continues to explode and the eldest generation of advisors ages out and retires en masse. Serving the next generation of wealth while still taking care of prior generations is going to require firms and staffers to scale themselves with technology. We’re all going to have to provide more service, for more people, than ever before.

AI is going to play a role in this but perhaps not in the way many would think. There are two versions of the AI premise and both could be valid. Version one is a handful of new companies will utilize AI to replace human advisors and serve clients directly via chatbots and suggestion engines. The responsiveness will provide the right amount of verisimilitude to make people feel like they’re being heard and cared for and listened to and understood. This premise is wrong if we’re talking about the traditional bread-and-butter client for registered investment advisors of $1 million to $25 million in household wealth.

If we’re talking about the mass affluent - $100,000 to $1 million in investable assets - it’s possible that there could be one or two companies that can build a business this way, but you wouldn’t want to be an investor on those cap tables. It’ll be one more race-to-zero business a la the robo-advisors I’ve recently written the eulogy for (read ‘The Bet’, which is my definitive history of the rise and fall of robo ).

The venture backers in Silicon Valley made the bet 12 years ago that the robo-advisors would start off with lower income, younger customers and perfect their product before moving up the value chain and displacing the middle, then the high-end players in the industry. This is classic Clay Christensen-style disruption where a competitor starts at the bottom and works its way up, shocking the incumbents with its ability to crush margins and gobble up share.

This has not happened. And I told you it wouldn’t happen. And here is why: Rich people don’t talk to robots.

I have been around wealthy people more than half my life at this point in a professional and personal context. I have worked for and with thousands of wealthy families. And the number one thing you do when you have lots of money is you pay people to deal with stuff. You trade your money for time and convenience. You make sure that you are paying people enough so that when you have a question, they are incentivized to pick up the telephone. Rich people do not attempt to save money on professional services and advice. They don’t want the cheapest doctor, lawyer, accountant, personal trainer, financial advisor, psychologist, college advisor, etc. They want the best available and, within reason, they are happy to pay for it so long as they feel they are getting value for their money.

Rich people don’t attempt to save money by agreeing to sit on hold. They don’t want to engage with recordings, email chains, chatbots, webinars, call centers, customer service hotlines or any of that shit. What is the point of being wealthy and successful if you can’t afford to be taken care of and have knowledgable, accountable professionals at your beck and call.

You have to have lived most of your life on Mars or among inexperienced college students to not understand this. I’m amazed at how many people still need to have it explained to them. “Literally, have you ever met a rich American before? Are you from another galaxy?”

This is how I feel about the people I see pitching a new wave of B2C AI financial advisory products. I won’t say this to their faces but if I were less diplomatic, I might be like “You are most definitely wasting your time, although I will concede that some of you will be able to trick an incumbent into overpaying to acquire your startup.” One hundred “AI Advice” startups will launch and get funded in the next three years. Two or three will get close to scale and then plateau once they’ve run out of the percentage of the population for whom the movie “Her” seemed like an idyllic modern-day love story (It’s Joaquin Phoenix falling hard for the voice programmed into his phone).

Most people don’t want this for themselves. If you’re going direct-to-consumer with an AI advice offering, count your TAM in the tens of thousands of people, not the tens of millions, and recognize that as your typical customer’s wealth grows, so too will the cost of their lifestyle, the complexity of their situation and the anxiety level that comes along with that.

Wealthy people are going to want to talk to a person about their problems, no matter how well the parlor trick has succeeded in faking empathy when their portfolio was smaller.


I have a travel agent. In the Year of Our Lord 2024, indeed, I work with a professional for booking hotels and restaurant reservations and attractions and flights and planning the itinerary. How much does it cost? Some trips are too expensive to not pay for a professional to help you plan and execute.

For most of my business travel and weekend trips, I just book on Delta’s website or the JetBlue app. No problem. Cheapest price for a good seat on a timely flight, decent hotel room in the right part of town. But then there is a trip with meaning. Something you will remember for the rest of your life. When I’m taking Sprinkles to the Amalfi Coast or bringing the kids to Paris for the trip of a lifetime, I’m not interested in spending $20,000 and making all kinds of mistakes. Wrong resort, bad transportation, third best tour boat company, dealing with the concierge, picking a mediocre restaurant, etc. You’re going to spend a lot of money for a trip like this no matter what. And most people can’t afford to do it twice. There are too many other places to see. So for god’s sake, do it right if you can. Save the money on something else.

If I spend 25k instead of 20k and the trip is flawless, it’s money well spent. You can’t do that all the time but when it counts it’s worth every penny. Showing up at the Il San Pietro and the entire staff has been prepped for your arrival solely because Susan booked you (I can’t reveal her identity because I don’t want her to get too busy for me, LOL) - that’s next level shit. Being at all the very best restaurants and doing things in the right order and getting upgraded everywhere you go, getting better pricing where possible, VIP entrances to attractions, guides taking you into museums through a special door, saving you time so you can see and do more - that’s whats’s up. You can’t do that for yourself. You don’t have the experience or the connections. Nor would you want to. Booking amazing trips is the job of a professional.

Susan doesn’t compete with Expedia. That’s not her business. I don’t call her to set up two nights in Boca Raton. She only adds value at higher levels of travel when it really matters. The big trips. The milestones. And if you’ve ever taken a poorly-planned but expensive trip, you understand this. It’s not Bougie. It’s the opposite - knowing how to spend money is a whole different skill than knowing how to earn money or how to save money. I see people spending money like donkeys everywhere I turn. Three years ago there were people buying jpeg files for millions of dollars. It’s an epidemic. We live in a Donkey Republic.

Now my example above is just travel. Substitute “vacations” for “financial planning and portfolio management.” Then tell me if you still think wealthy people want discounted advice delivered via software.

B2B Wins

On the other hand, I think AI solutions for the industry are going to be absolutely transformative. I am as bullish about the prospect of AI tools to augment human financial planners as I am skeptical about the B2C opportunity. This, to me, is the real revolution we’re about to experience. Advisors who are currently taking care of $100 million in client household assets (this is somewhat of an industry standard benchmark for success) are going to find that they’re able to cater to a practice approaching $200 or even $300 million with the same time commitment and effort. This will be the new expectation that wealth management firms have for their advisor employees. The benchmarking studies will reflect this upgrade a decade from now. Everyone is going to be equipped and expected to do more.

Michael and I talking to Rich Cancro of AdvisorEngine on stage at T3

As we speak, AI tools to address every advisor pain point imaginable are now underway. One of the most cumbersome and time-consuming tasks that a senior advisor must complete each day is the summation of their last client meeting on Salesforce or other CRM after the conversation. The advisor documents everything that was discussed (both for service purposes but also for compliance reasons). This takes a lot of the advisor’s time and the client is already off the phone and long gone.

The advisor is not getting any credit for this post-meeting drudgery in the eyes of the client. They don’t even know about it. The client feels as though they had 45 minutes of their advisor’s time that morning. Great! What don’t realize is that once that’s over, the actual work begins. The advisor is documenting everything and checking off all sorts of boxes and bubbles on a variety of pages and platforms. Emails and Slack instructions are being prepared so that the firm’s traders and client service associates know which account to move which funds from, what trades need to be done in order to facilitate the dictates from the client meeting, what IRA needs funding, what paperwork needs to be Docusigned, which beneficiary updates need to be reviewed, etc. And every single instruction issued by the advisor to his or her co-workers must be verified, followed up on, noted, approved, explained, and more.

That’s how a 45 minute phone call turns into two hours of highly skilled labor for three or four people at a firm. Multiply this by four or five client meetings in a single day, then by five days in a week, 20 business days in a month. Then multiply it by the number of advisors a firm employs. It’s a huge lift. It’s not hard to see where the time goes and why the modern human advisor is constrained by the burden of their work.

Now imagine an AI digital agent that rides along with the advisor during a client phone call, silently documenting everything being discussed or suggested. The call ends, the client goes about her day. The advisor sees a summary of the call pop up on the screen in front of them, pre-populating the CRM with bullet points of the specifics while noting the time, date and topics addressed. Then an email window pops with a pre-populated paragraph instructing the advisor’s client service assistant with exactly what needs to happen as a result of the call. The advisor can edit manually or approve. “Jody, please transfer $50,000 to donor advised fund for Gilligan and Ginger. Dial back tax loss harvesting in account ending 8784 as funds need to be available by Wednesday. Update IRA beneficiary on recently transferred account with social security and date of birth for dependents Hayden and Jayden.”

An hour of post-meeting follow-up becomes a minute. The assistant’s AI is awaiting these instructions from the advisor’s AI. Jody is overseeing it all and directing traffic. Her capacity is multiplying at the same rate as the capacity of the advisors she is assisting. Everyone in the firm has their own AI assistant, This is enabling the firm to serve more people and double the amount of their time that’s dedicated to the only thing that truly matters - talking to clients. In this industry, every minute we spend empowering and encouraging our clients is a minute worth its weight in gold. Every minute we spend doing clerical tasks better suited to the computer is a minute that could have been spent better. AI is coming to change the game. As a business owner and a client service aficionado, I am here for it!

And that is how AI is going to save the industry from buckling under the demand coming our way.

Rich people don’t want to talk to the machine. But if you can talk to the machine for them to make their lives better, you’re going to win.

It’s coming. You should be excited.

Apple’s Vision Pro sells out

Michael and I just did an all new episode of What Are Your Thoughts. We talked about the new all-time highs set by the S&P 500 this week as well as the news that Apple has sold a ton of its first Vision Pro headsets right out of the gate. The Netflix for WWE news is in here too. I pitched him Snap Inc as an investment idea and also took a look at current market sentiment. It’s a great episode, you’ll love it.

Watch below or download the audio to your favorite podcast app here.

Carbone Las Vegas

We live in a world of hype and almost everything ends up being a disappointment. I have found that the anticipation of most things is a superior sensation to the actual getting of things these days.

But not always. Sometimes things measure up. They deliver.

I’m a New Yorker so when one of our restaurants opens in Vegas, Miami or London, I laugh to myself and say “can you imagine the a**hole waiting in line for that in a casino?”

Well, it’s not always like that. Carbone Las Vegas delivered. If you love the original in NYC, you will very much like its Vegas facsimile. They got the important stuff right if you can look past the mega-scale of the place. The food is great, the service is on point, the crowd is attractive. Lakers great Rick Fox was sitting next to us. He accidentally bumped Batnick on his way to the table and politely apologized. That was cool. Howard Lindzon had Michael, Joe Fahmy and I laughing for hours as the plates kept coming. Not a bad way to spend a Monday night.

with our friends Joe Fahmy (right) and Howard Lindzon (with Patron Silver) at the Las Vegas outpost of Carbone

Obligatory - the famous spicy rigatoni vodka - and it was perfect.

Boarding my flight home. That’s all I got for now, talk soon. - Josh