Kitces & Carl Ep 169: IS There A Future Of Financial Planning In The AI Era?

***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and YouTube Music.

Show Notes:

• AI May Transform Your Advisor Practice In 10 Years, But It Still Won’t Do Much In 2 Years
• Kitces Report: How Financial Planners Actually Do Financial Planning
• Cerulli: The Financial Advisor Industry Has a Headcount Problem
• Merrill Lynch 12-4-2 Rule: Merrill Lynch Rolls Out Service Initiative

Kitces & Carl Transcript

Michael: Greetings, Carl.

Carl: Michael Kitces, how are you?

Michael: I'm doing well. I'm doing well, but I have to admit now, because I mentioned it for the past few episodes, I am really missing the blue couch.

Carl: We just had a retreat at the house, and they make me bring it from upstairs down for the part of the retreat, so I'm going to have to just bring it down one more flight to the studio. I'll do it. I'll do it.

Michael: So, it's like it feels the call. It's slowly getting closer to your studio. You just need to complete its journey.

Carl: Just one more... I don't know if it'll fit through the window. It'll fit through the door. I will make it happen. Yeah. Know that it's alive and well, people at the retreat fight for...it's 12 people and only 2 can sit on it, so they fight each session. So, it's still getting used.

Michael: Excellent. All right. I'm glad to hear it. I'm glad to hear it's doing well, because I do miss it. I do miss it.

How Will AI Shape The Future Of Financial Planning? [01:04]

Carl: Yeah. What are we talking about?

Michael: So, I wanted to talk today about the question that I'm just hearing popping up a lot of places these days. We all are hearing the weight.

Carl: I can't wait.

Michael: Look, we're all... AI conversations are everywhere. And some folks are kind of believers it's going to displace everything. Some folks are naysayers and say it's overblown. Usually, the truth is somewhere in between the two. A lot of folks out there, including me, have basically said, I don't really think this fundamentally displaces what we do as financial advisors. I think our career continues to be what it is with some incremental changes as technology always brings.

But I think I just wanted to kind of bring or maybe explore further just that fundamental question is there a future of financial planning in the AI era? Because I know you have been, very much immersed into this space and using yourself. So, I guess, either, is there really a future of financial planning in the AI era? Or maybe can we put a little bit more color and description to, what does that look like? what really stays the same, and what are the things that are going to change?

Carl: That's a super fun question.

Michael: As this AI stuff gets more and more adopted more and more places.

Carl: Yeah, it's pretty wild how fast we seem to be hearing about it and all sorts... I read some crazy stat about some the outrageous claims in any new thing. The outrageous claims become so normal that you almost don't pay attention to them and don't even know what to think anymore.

Michael: Well, look, what was it? It's almost two and a half years ago now that ChatGPT went mainstream. And I remember then there were conversations of, there's going to be mass unemployment within two years because the AI is increasing at exponential rates. So, I'm like, "Okay, it's been another year or two. I don't see any mass unemployment." Maybe ironically, the engineers have inflicted this on themselves because there actually does seem to be a higher volume of layoffs in the software industry in particular. So, it turns out it's coding [better] than a lot of entry level coders.

But on the one hand, it's so disruptive and it's growing exponentially, so it's just a matter of time before there's mass displacement. And we're a few years in now, and there has really not been mass displacement. And apparently, it's still getting smarter and learning better and we are putting a bajillion of investments into AI data centers and bigger data sets to keep training it more. So, there's just this "inevitable," well, if it's not there yet, just give it a few more years. So, okay. Then I'm going to say, so fast forward us 10 years. So, it's the mid-2030s, and a couple of more of these compounding functions that are supposed to happen have happened, do I still have a job as a financial planner? And if so, what do I actually do?

Carl: Such a great question. I want to be clear. I have no idea, but it's going to be really fun to talk about it because I have lots of thinking about it. Here, I have a question for you. Just for fun, hypothetically, what would self-driving money look like? Pretend you're relatively high income, there's probably one thing on your list that you'd like to get rid of the most, subscriptions, and writing checks, and moving money, and opening accounts. That's the one thing that annoys me. And it doesn't matter what my income is, but one thing, I can afford to pay for that to go away.

Some people can hire landscape people, and some people can hire... But let's pretend you're in a world where anybody who has two iPhones and a car and the family... I don't know. I don't know where we draw the line. Basically, all of our clients are above the line, basically, right? And what would it look like? Just imagine, before we get to the question, what does self-driving money look like? What if I could pay to have all this go away? Meaning day-to-day touching of it. And what does that even mean?

Michael: I feel like we're getting to a lot of that now. Anybody remember when they got paychecks, you had to take it to the bank, and actually deposit it? That was a thing...

Carl: Fax something in.

Michael: ...for a long, long, long time. And if you wanted to move money or roll a CD from one bank to another, you had to go get it a check.

Carl: Pick it up, carry it to the other place.

Michael: Literally physically. I just feel like we've done so much of that. So, yes, it can get better. I've still got to log into my bank and move some money from the checking account to the savings account because the busters make me do that and deliberately insert friction because they know that means the money will sit in the checking account longer and then they can make a better spread off of it in good, old banking world. So, there is an aspect of, some of the reason why the money isn't so self-driving is because the financial institutions intentionally put sand in the gears because they make money off the sand. That's why I can't auto-move my money from my checking to savings as easily at most banks. Heck, that's why custodians make us do freaking trades into better yielding things and don't put us in an automatic sweep that yields better because they know if it takes us a few days to do it, they make a little extra money times, a trillion or two dollars that adds up.

So, if there is a part to me that's... I don't know how perfectly self-driving it'll get because the financial system actually has significant financial incentives to make it not totally smooth. But that aside, the technology is getting there. At some point, the bank will make it difficult and an agentic AI thing will figure out how to read the website and navigate the things and play the game anyways because that's programmable.

But I just quickly come to... okay, great. We've had systems like pay yourself first and set your savings up automatically already. Some people do, some people don't. And for most of the people that don't, it's not literally like they're incapable of creating a system and making their money more self-driving to do it. It's "I have certain goals," or, "Certain preferences," or "Certain desires to spend," or, "Other things that prevent me from following through to do that." And, even in a self-driving money world, "Okay, it's got to drive according to my goals and desires and values." Good luck figuring out what those are as a software program, because most of us don't know what that is for ourselves. That's why financial planning is a thing, and therapy is a thing. Many of us are on a journey in figuring this out.

Carl: I think that's the important part as it relates to your question. I just wanted to use the self-driving thing as an analogy. Because I don't think it's far-fetched at all to have something that is optimizing the best thinking, the best calculations, the best models all the time for my entire financial life, my investments, how much I save, how much I spend, what I'm thinking about will be left for my kids, my dad with zero plan, the funding of my goals. I could see all the mechanics of that, a system that's optimizing every day, every hour, every minute as self-driving.

But what's really important in that whole thing is, where do you want to go? And by the way, we often refer to this as...that's sketch, and we all draw this. You start at A, you're going to go to B. What happens when A is not A? What happens when I think of my starting place is, "Oh." And then, what happens when B1 turns into B2? I've been referring to it as B-ultimate. You never really know what B-ultimate is until probably the day before you die. You're always course correcting. And so, all I'm saying, I think...

Michael: I'm always having new experiences. I'm always learning new things, stuff happening in my own life...

Carl: Changing my values. Even my very values.

Michael: ...that changes my values, my priorities, what I'm focused on.

Carl: Yeah. And I think there's a piece of AI. I've been using... Here's the thing, so, I think this gets us closer to, is there a job? And I just want to keep talking about this, its ability to optimize. I ride. I spend a lot of time moving through the mountains, and I like to do it in a way where I'm sort of training towards a goal. And hiking or running or riding your bike with your friends is different than training towards a goal. And it turns out there's lots of research and lots of models, especially in worlds like running or cycling, and especially in cycling because there's a lot of data.

So, this is kind of a long story. I'll make it shorter. I spent the last two years really building, doing a specific kind of training to build a base. And those people who are listening would know, zone two training. And I show up at a race for the first time in two years, and have this kind of like shocking experience in terms of my ability, even though I hadn't done any of this really hard effort stuff. And I set new record, a heart rate, max heart rate I hadn't seen in 15 years, a 60-minute max heart rate I hadn't seen in 15 years.

So, I get home and I cannot make sense. I have all my data for 15 years of training. I have all my data in this app. And I text my coach, the guy who's been coaching for me in years past, really good guy. We haven't talked in months. I text him, "Hey, I had this experience. Can you jump on a call in?" And he didn't reply to me on a Saturday night at 7:00 in three minutes, so I got impatient. And I downloaded all of my data into a CSV file, and uploaded it to Chat. And started having conversations and said, "I want you to pretend like you're..." Chat gave me one of the... Now, it was based on events, how I was feeling. It was based on not allowing Grumpy Carl to come back, which is a subjective thing. That's one of my training rules is, if Grumpy Carl shows up, then the whole program gets pulled. We don't need to talk about that. But it's feelings. There were feelings in there, too. And it came back with this most amazing explanation of what happened. It gave me all this training stuff. And when my coach called me three days later, I told him I didn't need to talk anymore.

And so, my point here is, I could see a world in which all the technical stuff that's really, really important could be optimized all the time by the second based on a model, lots of models, the same models we all use, the same models that are being used now. But those models are only good, they're only good within the context of the human's, the person's life.

Back to, so, is there a job? I think there's even... I think the job we've all been thinking is going to happen around values, goals, connection, conversation, I just want to talk to someone, is going to be more... I think in a world where data, models, calculations are ubiquitous and at your fingertips, the other side of that barbell, the human, becomes even more valuable. So, I sort of feel like we've got to get this right where we're we still have to be the best engineers, prompt engineers, financial planners. And we got to continue to learn how to be deeply human.

(The Value Of) Financial Advice When Anyone Can Do It Themselves [14:58]

Michael: I guess that's part of the question. Do we need to be engineers in the future...

Carl: Good point.

Michael: ...prompt or analytical or otherwise? That's one of the ways that some people play this out.

Carl: It's a good point.

Michael: The technology will be an amazing analytical engine, and our jobs morph increasingly towards communicator, counselor, therapist, in these directions where it's mostly money and value conversations. Oh, and then, we'll put it into the magic black box and it'll tell us how that turns out.

Carl: Let's investigate that just a little bit because I want to make sure I get the use of the word engineer right, because you're exactly right to sort of push on that a little bit. I guess what is, this word is so perfect for it, but the prompt we're giving the tool, and largely the input, the interface between the human who says, "Yeah, I know paying off my mortgage, I could make more because my mortgage is at 3%, but it feels good." That's a terrible example, but just almost cliche, right? The interface between that and the tool, I'm calling that engineer, right? I'm just saying the planner, just like you needed to know how to use your...what did you use? Your reverse Polish 12BC, we don't even know what they're called anymore. What are they called?

Michael: HP-12C.

Carl: 12C, okay, yeah. Just like you had to know how to use the 12C on behalf of a client's problem or challenge or desire, I think now, we need to know how to use these increasingly complex and automated tools. But I don't think the value... Here's the risk to me. The risk is you don't understand your value. That your value, cliche, isn't efficient portfolio design anymore.

You and I were around, you and I were around when risk tolerance questionnaires were value add. And by that I mean pick a portfolio, right? We were around for the revolution of going from individual security selection like stock picking, stock broker, to portfolio design.

Michael: Well, to me, that's... Look, when I look at these conversations, that's part of what always crops up for me. That I started 25 years ago at the peak of the internet boom. And my friend said, "Why would you become a financial advisor? Anybody can invest online. It's so easy, a baby can do it." Because that was the neat trick, where it was, why would you take a white collar job that is now so easy for consumers to do themselves, that a baby can do it in their crib, detaining stocks? That really was the contextual area. It's, oh, and if that wasn't enough, within the first 10 years, 99.9% of all things that have been known to the entire species of mankind will be available on a device in your hand in less than eight seconds because smartphones are coming. And we're still here.

And so, to me, one of the most interesting thing, when I look at these, what happens when we get exponential technology growth, I'm like, "Well, we've had exponential technology growth for quite a few decades now." So, we used to do this with our HP-12Cs, and then the personal computer came. And then, we did it with our computers because we had special software in our office that no one else had. And then, the Internet came, and anybody could do it. And then, at least, we learned specialized knowledge things that you weren't going to get very quickly. And then, the smartphone came and all knowledge became available in people's hands. And so, why didn't all the other iterations of technology displace us, or even really materially change our days?

And when I look at it from that perspective, because now I feel like I've been in it long enough... Look, if I go back 20-something years ago, my meetings weren't that different. Look, it takes a certain amount of time to have a constructive conversation with another human being and get them up to speed and read them into the situation and engage them in the conversation and try to get to an outcome. So, meetings were 45 minutes to an hour, and they're still mostly 45 minutes to an hour. I made them longer for a while because I liked punitively long financial planning meetings. I eventually got over that, great. So, we used to have hour-long meetings, we have hour-long meetings.

Now, my hour-long meeting used to be a standard printout from a Morningstar Principia pro report of a bunch of mutual funds. Now, I've got a real-time, internally rate of return, appropriately-weighted return calculation of your exact portfolio with all the positions, with all the transactions, with all the detail, with mountain charts to show it over time, relative to a benchmark that I wish you wouldn't judge me against. I can do so much more now. Twenty-five years ago, I actually had to pull up my HP-12C to do a quick calculation on whether you were saving enough for college. Probably wouldn't do retirement, but you might do college. Now, I've got financial planning software that does all that. And I can put it up on the screen and we can interactively grab the sliders and move them up.

So, the technology already got exponentially better than it was. And they all are, basically, conversation aids for having a discussion with clients that has not actually changed all that materially, because technology moved massively in 25 years. And the human species has not evolved in any material way in 25 years. Takes us a little longer than one generation, maybe, to evolve as human beings.

So, most of us still spend, whatever it is, 8 to 12 hours a week in meetings, another 8 to 12 hours prepping and doing the follow up from all of the meetings. Then there's the phone calls and the messages that come in from clients between the meetings. They have to answer in a timely manner. And then, we got to get around to the compliance and a few other things. Just part of the overhead of the business. And then, my week is done, and I go home.

The Crossroads Of Technological, Emotional, And Artificial Intelligence For Advisors [21:48]

Carl: Quick, thought. Don't lose your train of thought, but quick before I forget. But remember, all of our stockbroker buddies are gone.

Michael: True. We have to evolve.

Carl: I don't think the financial planners that are listening and financial advisors that listen to this show have a lot to be worried about. I think actually, they have a lot to be empowered by. I think there's a whole piece of the industry, I would put it at 50%, 60%, maybe 70%, not the people that are listening to us, part of their services....

Michael: And bear in mind the aggregate, if you use Cerulli numbers, I think you're like 300,000 financial advisors, 100,000 CFPs.

Carl: And I don't know even...

Michael: So, just two thirds of all advisors "don't have CFP marks." And, yes, it's not a perfect proxy. Some non-CFPs do good financial planning. Some CFPs do not good financial planning. But it's a decent approximation. So, yeah, two thirds of advisors don't have any substantive training beyond their series exams, which is definitely not the bar it will take to be successful 10 years from now.

Carl: That's what I really think, is that if the income you're making, the revenue you're...if the fees you're charging clients depends on some idea that you have some special calculator... And the really great financial planners that you and I spend our time with already know this. They don't feel like they have some special...they feel like they're technical rock stars. They know how to use whatever...

Michael: You do need to give the client the technically accurate answer, or you must be really good at delivering really inaccurate bad advice.

Carl: Yeah, that feels to me like the crew... If I Venn diagram, these people would be like technical rock stars that know how to deal with humans. And so, what I run into all the time is... And I don't know where they are. I don't know if they're in their 300,000, or if they're in different industries that call themselves financial services, if they're not even in the advisory number, I don't know who these people are. I could tell you examples at conferences, they don't even know how to use the calculator as a metaphor, let alone... So, they're just... I think if that's the part. My stockbroker buddies, when I started, they all said, "Yeah, I know, Carl, we need to change. But I only got three years left. I'm going to be fine." Again, they're all gone.

Michael: Well, the...

Carl: Yeah, that's what I think, is that... Yeah, go ahead.

Michael: I would say, the other thing that actually strikes me in that context, it'd be fair if I do go back, because they're saying you're furloughed, takes about an hour to get a client through a conversation then you move on. If I really reflect on it fairly, I think we actually have fewer meetings now than we did 20 years ago. Unfortunately, I haven't...

Carl: I think you're right.

Michael: We haven't been doing our research long enough for me to actually pull good data from 20 years. But I think I'm just remembering back, because look, the business is more...

Carl: It's like a quarterly meeting almost. We almost had... I remember 12-4-1 [editor’s note: 12-4-2], or whatever the Merrill Lynch thing was.

Michael: And just the meetings were more transactional, the activity pace was. You had to have a high activity pace because revenue was not recurring. If you don't see a certain volume of new and existing people to find new transaction opportunities, your income went to zero, because it was so mostly commission based then. So, the irony to me when I look at it, and still for some folks I know today, the high-volume folks might do 15 to 20-plus meetings a week. And the ones that are more successful have fewer meetings because they tend to go deeper with their clients and much deeper relationships with their clients and are dealing generally with more affluent and complex clients that have more stuff going on and more needs to go along with it.

And so, ironically, for technology that was supposed to scale us up... If I went back 25 years ago and I said, "Well, you got 20 meetings a week right now, but you're going to have computers and the Internet and smartphones and robo and business process automation, all this amazing stuff. So, your meeting count is going to go down by 50%." And everyone's still like, "Well, actually, I assume it's going to go the other way." Is the technology supposed to get to the point where I just do...

Carl: Per client.

Michael: ...meeting, meeting, meeting. And I think meetings per client went down, and total meeting counts went down because total client counts went down. Because I used to have 250 transactional clients that I did business with once in the past three years. And now, I've got 100 clients plus or minus something...

Carl: Already the whole thing..

Michael: ...that my three-person team serves in a deep, ongoing relationship.

Carl: You know what I think happened?

Michael: So, the technology I think how it actually made us more focused into deeper relationships already.

Carl: Yeah, I think that's all that... I'm insanely hopeful for the people that you and I hang out with. I think what happened in those clients... So, let me just see if I can tie this thread together. Those clients that we're referring to that went from where we were 20 years ago to where we are now, I think those clients, they probably would not use this word. I think those clients have gotten to the spot where their money is largely self-driving, because the advisor is driving. And I think that they say...

Michael: They're not driving. Well, not so much.

Carl: The money's not driving. What I think they're saying is, and I've heard these words lots, “I don't even think about it anymore, Christie takes care of it." It's not even a thing. That's the kind of referrals that really good planners get, "They didn't tell me exactly what you do. They just said that they don't think about it anymore." And so, I think...

Michael: I think that's a good note as well in this context that, look, consumers have and always continue to exist on some spectrum from do-it-yourself-ers to delegators that don't want to deal with that stuff and just would rather have someone else do it for them. And just to me, that's just human nature, we live on that spectrum, and it doesn't go away.

So, there's a part of me that every time I hear someone say, well, financially, "Why will anyone use a financial advisor in the future? I can just do all this on the Internet already, never mind with all the tech that's coming." I'm like, "Yeah, because you're a do it yourself, or you like doing that." That's not historically who hires financial advisors in the first place. We tend to work with delegators. Now, maybe there's a constraint factor there that says the future of our industry might only be continuing to work with delegators who don't want to DIY it, who don't want to take the time to learn it, who don't want to take the time to figure out which tech platform is the good, self-driving money platform, which is the bad self-money driving platform.

The robo advisors ultimately, mostly failed because marketing was prohibitively expensive or viewed another way. It was really tough to convince someone to do the research on seven robo advisors to pick the good one. If I'm going to do that much research, I may as well manage it myself. And if I don't want to do that much research, I'm just going to find an advisor. So, why do I need a robo? And I think that's where they got stuck as well, because even picking the vendor, even picking the technology platform is still actually something that do it yourselfers tend to do. Delegators talk to their friends and family and find someone who's good, and then, just say, "Please deal with this for me."

Integrating AI Into Processes And Coaching [29:40]

Carl: Yeah, I think that's all exactly right. And... I want a giant ‘and’ here. This does feel fascinatingly different and nothing to be scared of. That experience with my endurance coaching was...

Michael: So, what...

Carl: It's just amazing, yeah.

Michael: Extend that further. So, what changes in my day-to-day and week-to-week?

Carl: As a client or as an advisor?

Michael: As an advisor,

Carl: Look, that's a whole other episode for us to talk about. But I would literally be... I would, today... And I love the model. And I can't remember who, I read it somewhere. Get a second screen – and I literally have two. There's one over there. I have another screen over there. And on that screen exists my AI tools. And I'm trying to slowly shift from this screen to that one more and more and more. And so, I would just, anything...

Michael: So, what's left on this screen?

Carl: That's a really good question. Conversations are left on the screen for sure. This Zoom, this conversation is left on the screen, connection, deep coaching that I do with a bunch of advisors is left on the screen. But if I go to write an email, if there is an email... So, I would just be thinking about this way, anything that you have to do twice, just be thinking about... I'm not saying you can. I'm saying engage in the thought experiment. Would this be better if I built a model around it?

Emails a great example. Any email that takes you more... You know the emails that you literally look at and you're, "Oh, jeez, I don't know how to reply to that. This is going to take it..." It probably takes you two days to... It pops up and you ignore it and you avoid it. And then, when you finally sit down, it's 90 minutes. Any of those, you can shortcut the...you can get to the editing part so much faster. So, any creative writing, you can solve the blank screen problem.

I, the other day, I was doing a little retreat where we took four people down to the desert in southern Utah. And normally, it's two days of anguish to figure out what I'm going to cook. Well, how do you cook over the fire? And what would you...? So, normally, I just end up making burritos for breakfast, lunch, and dinner. I just... I went into Chat, I said...

Michael: Carl, for the record, I'm actually quite okay with burritos for breakfast, lunch.

Carl: Yeah. But I was...

Michael: It sounds like a plus to me.

Carl: "There are four men coming. They weigh this much. We have this many meals. Give me." And I want it to be awesome. And we're only cooking over the fire. Here's the constraints. It planned an entire menu plan. It gave me a full shopping list. I uploaded the shopping list to Whole Foods. I pulled up. They hand me the bags. That feels very interesting. So, I'm just sort of like, anything in my day to day work. How you spend your time.

I would be super interested in uploading... I have a buddy who uploaded his 300-page journal. And asked Chat to pretend...and he gave it a bunch of prompt instructions and said, "Tell me about my blind spot." So, I'd be super curious, how do I spend my time? If you could get good recordings of client meetings, and this is happening more and more with Jump and other tools, I would be using those like gold. "Hey, do you see anything I missed here? Was there any question I didn't ask? What could I have done better? Did I pause long enough?" I would really be using some AI tool for instruction and coaching on that. And by the way, that's not, calculate the net present value. These are more qualitative uses. So, those are some ideas.

Michael: So, these are all meeting, communication, I don't even know if the right words are, coaching, counseling...

Carl: Connective. Yeah, I think they're engagement, they're client... You could almost go so far, I'm not sure, to say, client-facing. And all of these tools, by the way, are just making you better, more valuable.

Michael: So, is there any room left for technical expertise, or does this fall by the wayside because the AI gets too good?

Carl: I don't know the answer to that, but I have always felt like in our profession, that there's something about the confidence of knowing what's going on inside the calculations, there's something about you knowing that. Even if you never do any more, there's something about you, the confidence of being...versus secret black box. So, I don't know that that changes.

I just remember the investment advisory side, even though I knew it wasn't my value anymore, I felt like I could look people in the eyes and say I can go toe to toe with anybody on why and how we built this portfolio. And I don't know, a lot of the advisors, you and I, don't spend time with... When I run into them and I ask them questions, "Hey, why do you build portfolios like you do?" They're like, "Oh, our research team." That's not the answer I want. I kind of want, "You want to spend three days with me in front of the whiteboard. I'll show you." That's the answer I want. That's the answer I want. Even though it's not your value, I want to know their table stakes value. It's required. That's my feeling. I don't know that I'm right, but that's my feeling on it. How about you? What do you think? What happens to technical expertise in that world?

Michael: I think I would agree with that. Yes, there's always an element of if you don't have a certain amount of technical knowledge and expertise, the once in a blue moon, however often it is, that the output from the software is not good... If someone input something wrong, you accidentally gave it the wrong prompt, it picked up something in the conversation that was not accurate. If you if you don't have enough knowledge, you can't see the wrong output when it comes out wrong. And lots of harm and bad things can come from that. At best, you have a bad conversation with the client when they realize that the numbers aren't adding up. And at worst, just you get patently inaccurate advice because it was wrong.

Carl: Yeah, that too.

Michael: There's always a layer there. I think beyond that, look, there's always a simplest rung on the ladder questions that increasingly get automated by technology. Yes, every now and then, there's still a client, where they actually reach out and ask what the Roth deadline is and you have to explain it. But increasingly now, if they want to know what that is, they just punch it in their smartphone or they ask Siri or Alexa or ChatGPT or whatever it is. There's a layer of simple questions that increasingly vanish. And as the bar gets higher, the simple question threshold gets higher. And so, to me, just that continues to push the bar up for advisors.

Look, literally, AI is really only good in areas that have been very well covered in the past. It's not good at novel, new ideas and innovation because it's literally kind of a pattern recognition machine, of all the things that have happened in the past. So, there's always a cutting edge of knowledge. There's always a cutting edge of expertise. There's always people that are in newer, novel situations, where the answers have not all been figured out, written, documented 47,000 times on the Internet for AI to train on, where there's opportunity. I do think, to me, that does, though, it raises the bar. Where it used to be a series exam, now increasingly, at CFP, in the future, it might be a higher level than that. Just the table stakes it takes to be smarter than the smarter than the AI about the particular domain that you're in.

I think there's an extension of that, which I had always heard from various versions Philip Palaveev of, it's easier to be a big fish in a small pond. I'm not going to be smarter than the AI at everything, but I might be the smarter than the AI at one particular client problem, which means, to me, this increasingly, the bar gets higher. It's increasingly a world of specialization. Can't be smart than AI at everything, but I can maybe be smarter than the AI at pilots for a particular airline have been through 37 mergers over the past 40 years of their career. So, I think we get more specialized. I think you have to stay ahead of the technology. And the technology just becomes an increasingly powerful tool to have better conversations with clients.

Carl: Yeah, yeah, as we sort of wrap up here, I don't... I kept hearing you use the word smarter, and I was like, "It's so interesting to me." I think that's the right word. I also think...

Michael: I don't know if it's all right word.

Carl: Well, the AI tool allows me to... I know what scenario I want to run, now, go run it 5,000 times. I know I want this nice meal, now, give me seven things, and give me this... It just makes what I'm already thinking faster. It's not even the right word. More efficient. I don't even know that I want to be faster. I'm not thinking I want to be superhuman. I'm just saying, it's so much easier now than it was. But you need to know where you're driving to. You need to know why you're doing it.

Michael: Look, we've had software for 30 years to get increasingly effective at optimizing the calculation of, how do I get from here to there? Here to retirement, here to my vacation home, here to my whatever the goal is. The problem is people are not terribly clear actually about their goals. They're not really clear about their values. They are not great at always taking behavioral steps that align what they say their goals and values are to where their money is actually going and what they're doing. And just to me, there's human stuff there. Just it's not... Yes, when you really finally get to the right goals and values, and you need to help them formulate a plan, you need a technically accurate analysis to do the thing and come up with a recommendation. But most of the time, we don't have clear enough inputs to do an analytics output.

Carl: Yeah, totally. And I think that's why the people listening to this show are safe. And I think... not safe. It's not only safe, but excited, and shifting increasingly to this deeply-human opportunity, while retaining my technical expertise. It's just such a beautiful job. So, anyway, that's where I think it goes.

Michael: All right. Awesome. Thank you, Carl.

Carl: Cheers, Michael.