This Tech Helps RIAs Mix In Private Assets

“We aren’t just going to slap AI on everything to increase their valuation,” he says. “We’ll build an AI-based product that’s commercial and solves a need.”

Falls began at GeoWealth in 2012 as managing director and within a year was promoted to CEO. His entry job in financial services was in operations at Frontier Wealth Management, which he joined directly from the world of professional basketball, having played in Europe for nearly three years.

While GeoWealth, which has strategic collaborative partnerships with BlackRock, Goldman Sachs and Apollo, may not be rushing to unveil an AI-based product, Falls praises the technology’s capability to create efficiencies in financial planning.

It can “play a very large role,” he says.

In the interview, Falls argues that advisors are “more open to outsourcing than they have ever been.” With that, he says that there’s now a greater need for TAMPs.

Here are highlights of our conversation:

THINKADVISOR: You’ve pointed to a “technology gap” that RIAs were facing that you were trying to fill with your product. What’s the gap?

FALLS: Traditionally, advisors have used technology to implement public investment portfolios, and private investments were held away. Our technology lets advisors blend public and private market investments in a single portfolio.

THINKADVISOR: What’s been the evolution, then, of your unified managed account?

FALLS: We started by including private investments in portfolios. This year we’ve launched direct indexing through our partners at BlackRock and Goldman Sachs, building on our UMA technology and infrastructure to allow access to new investment products.

When we started, we did ETFs, then mutual funds and then added direct indexing. We’re now very close to adding fixed income SMAs.

All those capabilities were traditionally accessed as stand-alone — you had to buy them independently. Our technology allows you to buy them together in a model portfolio.

THINKADVISOR: What’s been RIAs’ reaction to your new technology?

FALLS: Advisors are looking for a more integrated way to invest. We feel good about the initial reaction. We’ve had nice growth.

We’re certainly still in the early days of the private-market capabilities, so we’re continuing to scale that up. There’s a lot of interest and energy around the space.

THINKADVISOR: What do you see as the future of TAMPs? Will there still be a need for them, or will they get phased out eventually?

FALLS: There’s actually more need for TAMPs. When I look at our space, there has been almost too much cross-over and dabbling during the last five to seven years in terms of understanding what your core competency is.

AI forces people to focus on their core competencies. So we’re seeing advisors more open to outsourcing than they have ever been because they’re getting back to their core competencies of working directly with their clients and not focusing on repetitive tasks.

THINKADVISOR: Why are advisors more open to outsourcing, though?

FALLS: There’s margin compression and acknowledgment in a growth-oriented world that spending time with clients is your best value-add. We see the best advisors really focused on them.

THINKADVISOR: Are any of your products AI-based?

COLIN FALLS: That’s a loaded question. Our software engineers and back-office operations have used AI for years. That’s where, at least in the short term, we see the most value.

We haven’t built, and frankly, do not have, a road map to build an AI agent that would be integrated into our platform as a product.

THINKADVISOR: How come you haven’t hopped on that bandwagon?

FALLS: It’s always under evaluation. There’s a lot of noise about AI in the space. It’s no doubt going to change our industry.

AI isn’t a magic bullet. There are a number of areas that could incrementally improve efficiency across the industry, which will be significant over time.

Every business is going to position it in a different way. We want to be deliberate about how we do that. We’re not just going to slap AI on everything to increase their valuation.

We’ll build an AI-based product that’s commercial and solves a need.

THINKADVISOR: How can AI help advisors do their job better and earn more money other than by boosting efficiency for time-consuming clerical tasks?

FALLS: I think in the short term, that’s still going to be the primary driver. If you can reduce costs, reduce personnel and create efficiencies, that will help you grow and be more profitable.

I’m not going to take a 20-year view on whether AI replaces the financial advisor. I don’t believe it will. It’s not too dissimilar to how advisors engage clients relative to robo-advisors.

Current clients with the most wealth in the United States want a [human] financial advisor.

THINKADVISOR: Should advisors be using AI at all?

FALLS: If I were a financial advisor, I’d be really focused on [applying AI] to [handle] redundant tasks.

In financial planning, it could add a lot of efficiency.

THINKADVISOR: How so?

FALLS: Because financial planning is rules-based and process-oriented. You can set rules, whether it’s for estate tax or cash-flow planning. You could create automation. That’s where AI is at its best — taking data sets and creating automated work flows that replace humans ultimately.

Because financial planning is so systematic, process-oriented and rules-based, it’s right for AI to play a very large role in it.

THINKADVISOR: Not to change the subject too much, but this is interesting: After graduating from Notre Dame, you played pro basketball in Czechia and Italy for 2 1/2 years. Why did you leave the sport?

FALLS: I didn’t want to [keep playing and] come back [to the U.S.] to start working in the business world when I was in my 30s. I wanted to turn a page and get started in the world outside of playing sports.

I was ready to do something else. By 2010, I was ready to move on.

THINKADVISOR: You’d earned a BBA in management entrepreneurship at Notre Dame. Right?

FALLS: Yes. So I’m doing what I wanted to do when I was in college.

THINKADVISOR: How tall are you?

FALLS: 6-foot-5. Not that tall.