As CEO of the fast-growing wealth management technology provider Orion, Natalie Wolfsen spends a lot of time discussing new developments in applying artificial intelligence to the financial advisor industry. So does colleague Reed Colley, the head of Orion’s technology business who previously founded Black Diamond and Summit Wealth Systems.
For the past several years, these conversations have focused on such themes as whether AI agents will be able to match the “human connection” provided by flesh-and-blood advisors and regulatory concerns involved with using AI to make fiduciary recommendations about investment products or income strategies
But in just the past few months, one question has come up with what Wolfsen and Colley said is “pretty remarkable frequency” in discussions with industry peers and collaborators.
“It seems like everyone I’m talking to has landed on one question as they think about how artificial intelligence is affecting the wealth management industry,” Wolfsen told ThinkAdvisor during a recent interview in New York. “Everyone is asking and trying to answer the simple question: Are we going to get AI-ed? By that they mean, are we going to get replaced by AI if we’re not careful?”
It’s an understandable question, according to Colley and Wolfsen, given the stakes involved.
“We’ve previously discussed how we expect the wealth management industry to double in size in the next 10 to 15 years — if not triple,” Wolfsen recounted. “That’s a huge amount of growth and opportunity, but it’s also going to be incredibly competitive. Industry executives are right to be asking how they can ensure their businesses remain relevant and ahead of the curve on AI.”
That’s what Orion is doing, the executives said, with “many exciting announcements” on the near- and longer-term horizon. For Orion, Colley and Wolfsen added, answering the “AI question” is a two-fold affair.
“On one hand, we’re grappling with AI developments internally at Orion, in terms of our own systems and capabilities and data,” Colley observed. “On the other, we’re also doing the same in terms of our platform and the deliverables we’re putting in clients’ hands. We’re investing big in AI to make ourselves more capable and efficient and to make a major difference in the lives of our advisor clients.”
Some AI Fear Is Natural
Asked whether they encounter significant AI fear or skepticism, the Orion executives answered in the affirmative.
“There’s definitely still some of that out there, and lots of it comes from the prior question I identified,” Wolfsen said. “We encounter some fear internally, because people are afraid that, you know, their jobs will somehow go away thanks to AI. It’s also a challenge with financial advisors, because they’re afraid that the value of what they do will be commoditized.”
Wolfsen said she doesn’t see either of those outcomes as likely. Colley noted that Orion views AI “as a powerful force multiplier” and not a means to either reduce its workforce or to replace the value that advisors deliver.
“Think about what AI can do to support the job of a journalist, for example,” Wolfsen said. “It’s going to help you do so much more research and increase the amount of information you can bring to your readers by 10-fold. It’s not a replacement. We think the same thing is true for our people — for our reconciliation specialists, our service professionals, our coders, our quality assurance people, you name it.”
AI will heighten the bar for that quality and depth of work that all manner of professionals can accomplish, Wolfsen added, and those who refuse to embrace emerging technology will find that the “old way of doing things” is making them fall behind. This can be concerning for anyone who isn’t committed to innovation and improvement, Wolfsen said, but that’s nothing specific to artificial intelligence.
“It’s a similar message for advisors,” Colley said. “AI has tremendous promise when it comes to helping advisors with all the tedious tasks that they used to have to do more manually. If we remove as much of the toil from the advisory process as possible, that frees advisors up to be superheroes for their clients.”
A Word on Data Security
The other primary area of AI concerns, according to Colley and Wolfsen, is in the domain of information security and data management.
“No surprise there,” Wolfsen quipped. “If you’re not worried about these things you probably shouldn’t be an advisor or a technology executive.”
Orion takes great pains to steward the client and customer data it holds within its platform, Colley said, leveraging both internal expertise and the support of “some of the best technology security vendors in the world.”
“We simply have to get this right,” Colley concluded. “It’s already a big task to manage and connect the massive amount of data that our clients are generating each and every day. That task is only going to grow more challenging as the pace at which we are generating data continues to accelerate — but that also means the ceiling on what we can accomplish by leveraging the data is going up, as well.”
Pictured: Natalie Wolfsen
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