Rick Nott is a senior director and private wealth advisor at Santa Monica, California-based Angeles Investments. He spoke to Business Insider about how to use AI, and why he’s both excited and scared when he sees an AI-native financial planning platform. The conversation has been edited for length and clarity.
When Claude first rolled out the solution to the financial advisor, I felt fear and excitement. How complicated will it be? How will it work?
I’m not a software developer, but I have some basic tech skills. LLM has allowed me to learn about coding, which I didn’t learn because of the workload. I know enough to know what I want, how it should look, and how to check the output, and now I can automate the rest of the process. AI has become the glue between different systems in use and different workflows.
I have shown some colleagues how I operate. One told me that I have another full-time employee output through the technology, by automating the data collection process and facilitating the analysis of my client portfolio.
What AI unlocks
I started my career while still in college in the late 2000s doing data reporting work for wealth companies. Between all of the software advisors use, there’s a lot of manual work, typically done in Excel, to connect it together.
Previously, I could only provide balance sheet reporting for clients with more than $100 million because it took so much manual work. Now I can do it with less people.
As the family’s net worth increases, so does the complexity. For many, understanding the financial system as a whole is the biggest pain point.
Banks and brokerage accounts are the easy part, but trusts, business ownership structures, and private investments, all of which report differently and require money to call capital, can take a lot of manual work to analyze.
Imagine a wealth advisory business serving 30 families, each with about 10 personal investments. Each investment generates about 10 documents per year, including monthly reports, capital calls, distribution notices, and tax documents. Each of these 3,000 documents takes a skilled analyst 15 to 30 minutes to analyze and filter our reports.
That’s 750 to 1,500 hours a year, most of which are spent in the weeks after each quarter closes. With AI, the data is extracted and mapped as it arrives, and an analyst reviews the work instead of a team racing against a deadline.
The goal is to create a one-page document or report on your phone that is as close to real-time as possible.
There’s a lot you can do with all of your data in one place. For example, a two or three sentence prompt can expand into a full email to the client, with all relevant and accurate information filled out. You can then personalize it to strike the right tone for your client.
How AI is changing jobs
I think of it as part of a dynamic that’s been going on for years in my industry. Vanguard, ETFs, lower-cost, and robo-advisors have all implemented financial advisors.
But if you believe that lawyers only write contracts, or financial advisors only create portfolios, there is a fundamental misunderstanding of what they really are.
I tell my clients that my role is to architect a financial operating system, and, like any real operating system, a centralized data source is essential.
When you have a big-picture view of what your family’s mission is, you can avoid getting distracted by market noise and news. From there, you can move layers down to create a strategic plan and ask whether we are moving in the right direction, and what opportunities we might have. Another layer down, we work with a CPA to save money on taxes.
A complete picture of the balance sheet enables you to understand your available liquidity. Now I can spend more time developing relationships, the things that run our business. I can know anything and everything about the clients I work with and who I want to work with.
The future of financial advisors and AI
I have a natural excitement around tech, and watching the Anthropic webinar was incredible. My main concern is that it is not a subscription-based plan; it is token-based, which can lead to surprise bills for users who do not know how to manage the use of their tokens.
At a small RIA without expertise, people will upload a 100-page PDF document just to ask a basic question, like how old are the children they trust. That will rip through the token.
We are priced out internally, and we have to pay significantly more for the token-based plan than the subscription-based license we have now. Maybe eventually everyone will have to pay for tokens that way, and the cost of tokens is going down.
We learn to do things faster and at lower cost, but in this industry, we do it for a specific reason: to spend more time with the people we serve.
The main way our clients provide information is still by speaking. There is a significant amount of nuance. You may be able to understand something and infer what’s really being said. But note-taking software is still wrong all the time. You should check again.
Money is emotional, and I question whether AI can replace our need to connect with other humans.
Do I see someone sitting across the table from AI on a speakerphone? Probably not.