Artificial intelligence has been the unavoidable focus of attention for firm leaders, retail advisors and conference attendees this year, as firms contend with how best to integrate the potential promise AI holds into their workflows.
Accompanying the rise of generative and agentic AI has been an explosion in the number of service providers touting their AI bona fides. However, some technology experts (including those in AI-based vendors) are warning providers and firms alike to be wary of a kind of mission creep in offering AI solutions to all problems.
According to Sanctuary Wealth Chief Technology Officer Bob Coppola, trying to ensure firms “stay in (their) lane” is becoming a challenge when dealing with some AI-forward providers. Coppola said Sanctuary had gone as far as to “force’ integration with its customer relationship management system to avoid problems.
“But it’s getting harder, because we’re seeing a lot of the AI-based vendors are straying from what I would consider to be their core competency because they can,” Coppola said during a panel at the BNY INSITE conference this week in Aurora, Colo. “And the challenge that you have is it becomes anarchy.”
For Coppola and others at the conference, one of the biggest pitfalls in integrating AI vendor tools was maintaining legible data. According to Coppola, data is more important in the age of AI than ever before, as it will serve as the foundation for AI’s learning.
“I think that one of the challenges that we run into now is everybody thinks AI is the easy button; ‘AI will manage the data for me,’” he said. “And there’s a lot of truth that it will learn from data. But if your data is inconsistent and you’re calling a security something different in three different places, the AI is going to be confused.”
On the sidelines of the conference, Zocks Chief Strategy Officer Steven Latow affirmed that RIAs (and, by extension, their service providers) are under pressure to “AI everything,” and coupled with the explosion of funding in the space for AI-native companies, it creates “this kind of smashing together of opportunity without a clear definition of the problem, and pressure to go build around it.”
Zocks runs an AI assistant, notetaker and meeting automation tool for financial advisors, connecting CRM tools, financial planning systems, tax software and portfolio management tools and building automated workflows for client onboarding, account openings and document processing, among other needs.
The firm wrapped up a $45 million Series B funding round in January and works with more than 5,000 firms, including Carson Group, Osaic and Kestra Financial (in addition to recent deals with RFG Advisory and Hightower).
Latow said RIAs should not be tempted to see AI as a kind of “panacea,” as it is a tool first and foremost and may not be the right one for every situation. Nevertheless, the demand is driving an explosion in the desire for AI solutions, with vendors popping up to supply them (as evidenced by the Kitces Advisory Technology Map, which tracks fintech providers; Latow said the map had tripled in size over the last 18 months).
“It’s really exciting, because it means that tech is getting adopted,” he said. “But it also means that there are a lot of companies that, for lack of a better word, are kind of a solution looking for a problem.”
According to Ainslie Simmonds, an executive platform owner with BNY Pershing Wealth Services Platform, the industry is making a “pretty dramatic shift” toward “fewer, more connected partners” after more than a decade in which many firms brokered partnerships with providers that could reach over a dozen (or more).
Simmonds saw the same trend in AI vendor adoption, with firms increasingly aware they need to maintain data layers across systems and providers.
“The firms I talk to now have a real awareness of the importance of their data layer and are on the right track for leveraging AI on top of that solid platform,” she said. “But there’s still a lot of work to do, and I think a lot of firms are in the middle of building their strategies around all of that.”
Indeed, some firms have opted to build an internal agentic AI assistant rather than outsourcing their AI needs, and Chip Kispert, a managing partner with Beacon Strategies, sees this as another point of bifurcation between the industry’s largest firms and their mid-size counterparts.
To Kispert, the latter firms don’t necessarily have the budget to build in-house, and may have to rely on their custodians, which can put them “behind the curve.” However, Kispert stressed that it doesn’t mean those firms should opt to build internally.
“Larger firms can support building when it’s appropriate. If I look at mid-size broker/dealers, if I look at mid-size RIAs … they shouldn’t be tech shops,” he said. “They should not be tech shops, and they should be stewards of their tech.”
