When Automation Makes Advice More Human with Ritik Malhotra

[00:00:16] Doug Heikkinen: Before we start, can you give us a nutshell about yourself, where you've been, you've had such an impressive career, and what Savvy Wealth is?

[00:00:24] Ritik Malhotra: Absolutely. Well, the story for me starts back in California. So I grew up in the Bay Area about an hour south of San Francisco and just fell in love with technology, a really formative area that I was spending a lot of time in growing up. Went to school in the area at University of California at Berkeley and ended up dropping out after my third semester there.

And since then have started two technology companies. One was a cloud storage software company that we sold to Box in 2014. And the second one was a FinTech company that was in the corporate wealth and corporate banking space that we sold to Brex, another FinTech company. And as over the years building those companies, eventually moved to New York City in 2019. Right right at the end of the year. And that's where we ended up starting Savvy Wealth back in 2021. So a lot of moving around, a lot of different companies. But to get us to where we are today, Savvy Wealth, we are an AI enabled modern platform for independent financial advisors.

What that means is we help independent financial advisors run their business by handling everything using software and service, to automate their middle and back office. We really believe that all of the things that an advisor is doing that's not directly spending time with their prospective clients or their existing clients can be automated away and gets them time back, gets faster outputs for the clients, and results in better flying outcomes.

So our core mission is to make great financial advice easier to deliver, and we do that by enabling that financial advisor to do that.

[00:02:07] Doug Heikkinen: Great. Let's dig deeper into that. So how do you think automation in AI can actually make financial advice more human rather than mechanical or distant?

[00:02:17] Ritik Malhotra: So it's, if you think of the analogy of a, let's call it a photo negative.

If you think about, when you're producing a photo, you're really trying to get the best photo quality out there. You're really looking at what captures the moment and so that there, there's one way where you can optimize the quality of the camera, but a lot of it can be done by editing away all the things that actually don't matter or the things that are removing from that moment.

We find that if you look at the data, 70% of an independent advisor's time that's not on Savvy, is actually spent in areas that can be moved away. This is the middle and back office. So these are things that they have to do. Things like compliance on a quarterly or annual basis. Making sure that they're documenting all the notes that in their client meetings. Handling things like getting data into the right system so that they can even start to do a financial plan. A lot of paperwork with the custodians because they haven't modernized their own systems, and so they spend a lot of time on the phone and just printing and scanning and back and forth.

These are the areas that we have found that automation, both from a pure software automation perspective and also AI nowadays, can actually help either speed up or just eliminate from the advisor's list, which actually frees up all that time. Now, with that freed up time, that means that your advisor actually has a lot more time to think about you and your situation or spend time actually analyzing the financial plan rather than trying to tinker out and get the data at the right place, which means that they can actually find and spend time on things that actually drive value to you, maybe achieving those goals that you've outlined.

Or it also drives mental clarity. Ultimately, if you're not a frustrated advisor about why the custodian can't do this thing and you have to call them the 10th time, you're also gonna be generally happier. And funny enough, that's actually what advisors say. A lot of their clients come to them after they move to Savvy and say, you know, you just seem happier and more joyful.

And I think that's something that we take away as a win.

[00:04:12] Doug Heikkinen: That's fantastic. I've seen you mention in the past that you feel money is deeply psychological. As financial lives become more complex with crypto, variable income, new asset classes, how can technology help advisors meet these emotional and behavioral needs more effectively?

[00:04:32] Ritik Malhotra: It's a really interesting point because the research will tell you that money is emotional and psychological based on an individual's upbringing and lived experiences, which isn't any surprise. Oftentimes you form certain opinions about money, spending, budgeting, all those things based on what you're seeing growing up.

And actually it could be pretty hard to unwind them. And actually a lot of the time that is the job of financial advisor often to help educate and kind of bring them over to a new way of thinking about money. Now, as you think about. All of these new instruments and you know, all the call it more complexity that's incurred in the financial services industry over the last couple of decades.

Those are areas that I would say can cause psychological, call it, not mistrust, but a sense of turbulence. And what I mean by that is if you don't have any prior knowledge or prior basis on how to understand all of these new things happening in the financial services industry, whether it's crypto prediction markets or some, you know, new hotshot investment that your friend told you about, your mind is unable to truly fathom exactly what to do with this new information. Oftentimes, sometimes people are attracted by things like prediction markets or the ability to make a quick buck on the stock market. But that's the mind tricking them, and that's this, you know, the greed or the gambling need of the mind kind of coming into play.

And that's generally a negative psychological reaction. Other times there's a feeling of, well, what am I missing out on? All my friends are talking about this. I'm seeing this thing called crypto in the markets. Do I need to do something? And without having perfect information, that can also be very difficult for an individual to wrap their mind around.

So we're talking about all this stuff. Now, where does automation of the advisor come in here? What we find is actually the biggest gap between these new age ways of investing money and dealing with money and how the system has worked for over a century is generally the information gap. The ones that understand these instruments, like prediction markets and crypto, et cetera, the fastest are the ones that are able to actually rationalize how to, use them and leverage them in their portfolio.

So our job is really to use technology to be able to provide that synthesis to the advisor. Again, this is no secret where AI can actually help quite a bit because it's excellent at synthesizing all of the real-time information. So today you could ask it, give me everything about prediction markets all the way up to today, which is a very new and novel concept, and tell me how this would apply to this type of a profile of a client.

And that client in our system has, we have the entire history, we know exactly what their wants and needs are. We know their risk tolerances and so on and so forth. And summarizing the new age instrument plus the client context can then give the advisor all the information they need at their fingertips to then go and calm down or explain something like this to the to the individual client way faster than what it would've taken before.

[00:07:28] Doug Heikkinen: That makes so much sense. We're publishing so much, so many stories on AI that I can see is gonna be overwhelming to a lot of people. And automation also sometimes is seen as a threat to advisory roles. What do you say to advisors who worry that AI could replace them rather than empower them?

[00:07:46] Ritik Malhotra: You know, it's a tale as old as time.

I feel like in the 2010s, we heard this a lot with the headlines talking about how the robo-advisors might be replacing advisors. And ultimately, look, there's a place in the market for a lot of these automation tools. We fundamentally believe, and we've said this since day one, that our job is to give automation and tools to the advisor because that is the best way to achieve our mission.

That's the best way to deliver great financial advice. And the way that we even articulated this to advisors about, hey, why would this still be true in 5, 10, 15, 20 plus years? Is that if you really look at all of the data, and there's a number of studies that were done on this, and I'll talk about one, which actually talked about how individual investors relationship to money and doing it yourself versus having someone else do it changes as the net worth increases. You actually look at the data and that roughly at about $250,000 to $500,000 of net worth is actually where there's a material shift, and oftentimes even lower, where these individual investors actually start to look to others for help.

Now, you might wonder, well, maybe in an age of AI and suddenly things get more advanced, maybe that won't be the case. However, going one level deeper, it turns out that there's a psychological, an emotional attachment to wanting someone else to do it. And I read this book on the psychology of effectively what the brain is doing when they're thinking about money and sums of money as it grows over time.

And it turns out it's a very similar response to, to think of it as a fear response. And oftentimes, even if an individual may know that they're told to invest the money here or park some in this fixed income strategy and so on and so forth, it is very difficult for them to believe that they should be the ones to do it because there could be downside risk.

And if they do something wrong, then they can't get over the fact because it's such a, an emotional element dealing with money. Turns out that the same thing is actually recorded by. Many of the top physicians across the country will never make decisions about their own family members because of how high risk the outcomes could be.

And they understand perfectly what the probability distribution is, but they'll always try to have someone else do the same make those decisions for them. And this is basically that same level of fear response that we see people have as well, and they want to defer that responsibility to the advisor.

So to answer the question, it's human evolution and the way that our brains think and fear that actually I think is why financial advisors will never be a profession that goes away, and automation is only benefiting them to actually help serve more individuals.

[00:10:20] Doug Heikkinen: Taking that word evolution, the industry is shifting from portfolio managers to family office stewards.

How does Savvy's platform enable advisors to integrate tax, estate, and cashflow management into a single client experience?

[00:10:37] Ritik Malhotra: Spot on. The trend I think for the last 10 years has been how can advisors do more, call it in the camp holistic wealth management. And so one of the things that we've seen is that enabling advisors with the right tools and services is the best way to go about enabling this holistic wealth management approach. So the relationship first is that the client trusts the advisor with anything money related. They're the first point of contact. Even if the client might be looking for a tax solution or an estate planning solution, they'll first go to their advisor for their recommendation on how best to proceed.

Knowing that, knowing that that client advisor relationship is sacred and is a really tight bond, what we actually did was we integrated and launched, just as part of this tax filing season, an integrated tax filing offering that enables the advisor at a click of a button to allow their clients to also handle all of their tax filing through the Savvy tax filing system.

This also is this combination of both digital first, and also CPA enabled. So the client still gets a premium like glove experience with someone looking at it. But again, you know, it might be a broken record by saying this at this point, but AI is excellent at doing all the work that requires, it used to require the CPA to collect all those statements, maybe the paper forms, fill in all the data, and then be able to actually run the tax returns.

We can automate half of that work using that software. And so that again enables the advisor to really enable this more, call it virtual family office experience without having the to build that out themselves and only serve clients that have $30 million plus. And we're able to bring that down market similarly with estate planning insurance and so on and so forth.

I think that's the way of the future. We wanna be ahead and want to enable the advisor in that way.

[00:12:21] Doug Heikkinen: You've talked about an adaptive financial operating system. Can you unpack that idea a little bit? What does that system look like in practice and how does it redefine the advisor-client relationship?

[00:12:33] Ritik Malhotra: So the word adapted is purposely used where there's two ways you can interpret it.

The first way that we identified when talking to advisors and they were coming onto the platform is that the platform that we were building had to adapt the way that the advisor worked. And what we saw was that there was no one size fits all by design. You don't want every advisor to do the exact same thing.

Some advisors leaned heavily on, financial planning is the first thing I do before I even look at any account statements. Others said you know, I'm big on in estate planning and insurance. Risk management and so on and so forth. And there was just this whole atmosphere or kind of surface area of where advisors are focusing their time and how they're working with their clients, the cadences and so on and so forth.

So adaptive really meant how do we enable the platform to be customizable, to allow the advisor to figure out what is their way of working with each client. Maybe it's even different based on client segments. And then, the platforms rules and workflows will adapt to it. One example of this is a, very simple, is a service calendar approach, where the service calendar for a certain type of client is very different from one advisor to another.

Where they're saying, Hey, I need to meet quarterly with this type of a client. I'm going to do estate planning a review in the first quarter. I'm gonna do an insurance review in the second. Financial planning review in the third, and so on and so forth. And there's this kind of rhythm and cadence that they have with that client.

Some other advisors say, Hey, I know this segment of clients. They hate it when I'm spending time with them. They want me to handle everything. I'm gonna change my way of working so that they're getting these updates in their email, which they like to read once a month, and that's it. And so those are some of the customizations over there.

The second way to think about adaptive is actually adapting it to what the client's needs and wants are, right? So this is a known element of the financial advising profession. Which is the clients, from one client to another, you can have the same net worth, but you might actually have very different goals.

So this is where we actually use a lot of AI that can help the advisor identify certain things that make one client very unique versus the other. And this is just speeding up what they're doing already. So as an example, one client might say, Hey, look, I have $5 billion in my accounts, but I I'm very risk averse.

I don't want, you know, I don't like volatility and that really makes me worry. The other one might say, look, I wanna go all in and, you know, I have no need for this money for 40 years. And so, like taking those inputs and be able to construct a financial plan around it also gives the advisor more control on how to adapt the way that they're working and their investment strategy based on these client wants.

[00:15:13] Doug Heikkinen: Transparency builds trust, but only if clients understand what they're seeing. How does Savvy's dashboard translate complex financial data into clarity for clients, and not just more charts and numbers?

[00:15:27] Ritik Malhotra: It's one of those things where we balance both what the clients are seeing directly in that client's dashboard, and oftentimes what the advisor's able to see when they're producing a report to show their clients.

So in both cases, what we're doing is for the client dashboard, a lot of the visual product that we're really showing the client is designed on extreme simplicity. In a matter of seconds, can they get down to the information that they're looking for? And if they need something advanced, they can go to their advisor or have another way to do it.

So client dashboard, easy to see all of your accounts all on one page, even if it's not managed by the advisor. That has to be at one click. The ability to kind of see where the net worth graph is across all those accounts without any clicks. That's the other area. You wanna access your files that you might have talked about, or that your advisor might have sent also in one click.

And so there's three or four of these tabs in kind of one click approaches that we have with a client. And it's designed because the feeling the client wants is that everything is simple and at their fingertips. They don't have to sift through, you know, mountains of reports to figure out these basic pieces.

Now there's a lot more work that actually goes into what simplicity looks like for the advisor. Because oftentimes we used to hear, hey, this financial planning tool is generating a 60 page report. I'm happy that it's very thorough, but I cannot present this to my clients. So they spend another three hours just trying to simplify and write down what they're gonna show their client.

Again, with the use of AI, we're able to take those, findings of a financial planning report and really crunch it down to, here's the one page report that summarizes everything. You could print it out, you could give it to the client an in-person meeting, send them the PDF, and they can always reference this and remember everything you're saying, and have this one page blueprint.

Clients like it, advisors like it because it's simplifying this highly complex set of a thousand different variables that are constructed. So that's actually another area where we found is excellent because it allows the advisor to still pair that one page report on, call it the financial plan, with a voiceover, which is sometimes an important element to calm any questions that the client might have.

[00:17:35] Doug Heikkinen: The future of advice seems to hinge on scale without sacrifice. So how realistic is the idea of a solo advisor managing a billion dollars in asset under management while maintaining a truly personalized service model?

[00:17:51] Ritik Malhotra: You know, I have the bet out of, I think it's very possible in the next few years. The way to think about how it happens is, if you think about just where, let's maybe reverse into the numbers here. So if you think about an advisor today about, you know, the average advisor, I think the Schwab report says is managing right around a hundred or a little bit more than a hundred clients. So if you think about that's where the average is today and 70% of the advisor's time, I think that's still relatively consistent based on the reports that studies that we've done and others have produced is spent on things that are non-client facing.

We actually think that you can just find ways to automate, shrink that 70% down quite a bit to to 10% in terms of all that middle and back office that the advisor's doing. So naturally now, you've nearly tripled the, ability of the, the amount of time you're now spending with clients, right?

So that's your immediate improvement. Now, on top of that, the advisors they get more personalized. It actually, with the use of AI, they're actually able to produce a lot more personalized answers and also understand how to actually action on the personal notes that they have with each client, at a much faster basis as well.

So our belief is that just means you're providing better service now. Because instead of you having to think for hours and hours on a per client basis, if you can get that answer faster, the client's happier, you get more referrals that way as well. And they're also trusting you to do a lot more because you're able to produce these results better with more automation and AI, as part of your advice giving.

So you crunch these numbers together and the back of the envelope says that you could still have the ability to be a solo advisor, operate with all of these tools, and effectively, instead of hiring a staff of people, you're actually able to use these AI agents that are on your behalf doing the analysis, getting you the personalized recommendations so you could review and edit, and then deliver it to your client, which will deliver the best financial advice and result in the client trusting you.

We think that's the, way to scale the business to a billion of AUM.

[00:19:58] Doug Heikkinen: Looking ahead, and I don't mind asking a technologist this question, what does the advisor of 2030 look like? How will technology, AI, human insight come together to define the next area of wealth management?

[00:20:12] Ritik Malhotra: Our view internally is that the advisor of 2030 has a few things right at their fingertips.

They have a team of AI agents that are specialized in the core functions that the advisor needs to run their business. You can think of this as almost four, let's call it four different areas. A financial planning analyst AI that's able to help them handle a lot of the heavy lifting on constructing financial plans, editing them, and so on and so forth, in real time.

The investment analyst AI as well, similar. So they're having to be able to proactively surface all the relevant market analyses for the portfolios on each client or identify trends and areas that the advisor should look at. The third is on business development or marketing AI.

So really helping the advisor identify if they want to grow. How do they do that effectively without having to suspend a bunch of time to really kinda manually do all that work. And the last one is really the admin AI. And this is all the stuff that's updating the CRM records, making sure that the forms are in the right place and doing that follow up email and so on and so forth.

We think that those, all those four areas, as we're starting to build this technology out and seeing amazing results, will just become part of the advisor's toolkit on being able to decide. Which area that they want to invest time in today, and have the AI kind of go do that. They effectively become the conductor.

They're now managing these four different agents that are producing results and proactively just looking at things that they're bringing back to them. So they're more the conductor and the editor. Almost think of it like a newspaper editor versus a writer. Now, in this world, they're able to then get a ton of leverage, right?

So they wake up, they're getting all of this insight that a 24/7 agent was able to produce. They're looking at, yep, this makes sense. Let's make this tweak, let's simplify it here before sending it to the client. I have these three client meetings today. Meeting preps are all ready to go.

They'll review, get a, maybe do a quick practice run with another AI to make sure that they're able to deliver some of the news that they need to. Great. So this is really that future version of the, advisor. At the same time, their job is also expanded. They now have access to all of these different financial products and services.

They have tax planning right at their fingertips. They have estate planning, insurance. They have the ability to handle all of those elements for the client. And those are also just happening behind the scenes with them just again being the editor conduct. Last but not least, the platform was able to do everything related to money and movements. Full direct integration into the custodians, access to banking and banking like services so that they can help their clients with anything money related, whether it's transactional, whether it is additional services like tax and estate planning, and so on and so forth.

And also their core areas that they have leverage on across what an advisor's doing using AI. So that's the advisor of the future. I'm excited to make that happen.

[00:23:15] Doug Heikkinen: The future is going to be so interesting and it seems that savvy wealth is gonna be smack in the middle of it. So Ritik, again, thank you so much for being with us today.

Best of luck to you for a great 2026.

[00:23:28] Ritik Malhotra: Thank you. This was great. Really appreciate it. And likewise, have a great '26.

[00:23:33] Doug Heikkinen: To learn more about Savvy Wealth, please visit savvywealth.com. We are on all social media platforms @Advisorpedia. Please give us a follow. For our producer Tory Miller and everyone at Advisorpedia.

Thank you so much for listening.