Real-World AI for Human-Centered Advice with Mohan Gurupackiam

People are really excited.

[00:00:23] Mohan Gurupackiam: Awesome. That's fantastic. So we have had a great tradition. We continue to keep that rolling and going on.

[00:00:33] Doug Heikkinen: Let's talk about technology.

[00:00:34] Mohan Gurupackiam: Sure.

[00:00:35] Doug Heikkinen: So Steward Partners has grown rapidly and serves a diverse advisor base.

How do you approach building a technology stack that is both scalable and flexible enough to meet the unique needs of all the individual advisors, rather than relying on one size fits all solution?

[00:00:51] Mohan Gurupackiam: That's a fantastic question. I think I'll start off with our philosophy. We strongly believe that no two advisors are the same.

 We believe that advisors have unique needs to fit the business models, and that's how we start off with, right? We talk to advisors regularly. We always have a two-way communication. It's not just us telling, Hey, you're going to use this tool or this platform. We have conversations ongoing with our advisors, so our philosophy is understand the needs of the advisor, talk to them, have that communication going on.

But also evaluate our technology stack in the context of the business models. As you rightly said, Steward Partners has grown and we have also become more complex in terms of our business models, whether it's supporting RIA or supporting M&A channels. So we basically drive a lot of our technology roadmap by the business models we want to support. And last but not the least, we also look at our demographic needs. I'm going to give you an example. Estate planning, right? Our clients are getting older. So we always look at what do the clients need? What do the advisors need? So demographic trends do play a big part in how we evaluate our technology stack.

But again, it's not one size fits all, but it's more how do you evaluate and take into consideration all these different aspects and factors and build that into our technology stack? That's the way we look at it.

[00:02:21] Doug Heikkinen: So when you're evaluating new technology or third party providers, what's the core criteria you use to determine if a solution is the right fit for steward part and its advisors? And you came from some big places before.

[00:02:34] Mohan Gurupackiam: Yeah, absolutely. So I think the more important part is look at the solution or look at the platform through the eyes of our partners, our advisors, our, administrative assistants, our camp councils. We look at the platforms through their eyes. We look at and we engage them much early on. When we try to evaluate a product, we always go engage our camp council, our FA council. So we actually take user input strongly. That's number one.

Number two is we actually monitor the industry trends. Kitces, T3 reports, we look at Hey, what products are gaining traction, right? Where is the momentum. Understand the changing landscape, right? That's important for us. We continue to look at those aspects.

We continue to look at industry where it's going. We also look at market penetration, especially around, hey, if you want to get into the RIA channel, RIA channels have different market penetration versus breakaway advisors. So if we look at those statistics as well. And last but not the least strategic fit for our organization, and of course economics play a big part, right?

We love, and we like non-linear cost structure. We would like, with higher volumes, we would like to drive down the unit price. So these are the factors we consider when you look at platforms.

[00:03:58] Doug Heikkinen: Can you walk us through the process of integrating new tools into your existing tech stack? What are some of the biggest challenges and lessons learned from implementation over the years?

[00:04:09] Mohan Gurupackiam: Sure. I think the first thing is, understand where we are comfortable. I think we need to know our own limits in terms of having strong use cases, having use cases that will give benefit to our advisors. So that's the first area. Understand and clearly identify areas where we could use artificial intelligence.

And the second part is understand what are the inner requirements. You cannot put a assistive technology if you don't have a good content management system in place. So understanding, hey, what is the underlying support structure. That is super important. Even when you talk about, say AI assistants, I'll tell you, we recently launched it and we had to do a lot of work, especially around content management, tagging content, cleaning up content, having version control. And we also would look at like hotspots. Where are we going to get questions? So all of these, you have to walk in well prepared. You can't walk in one fine day and say, Hey, I'm going to set up an AI agent.

It doesn't work that way. So if you want a successful broad adoption, do your homework.

[00:05:23] Doug Heikkinen: From your perspective, what are the most significant trends currently shaping wealth tech landscape and how has Steward Partners positioned itself to capitalize on these trends?

[00:05:32] Mohan Gurupackiam: So two areas to look at. We have seen the industry shift more towards a fee-based business.

There is a lot more coming in into fee-based business. There is movement away from commission-based business. That's one big trend. The second one is around, there was actually a good article by McKinsey where they highlighted the shrinking number of advisors. McKinsey's prediction is we'll have a shortage of around a hundred thousand advisors by 2034 in the wealth management industry.

And we think to a large extent, that has to be made up by the advances in technology. Studies say that roughly 40% of where an advisor spends time today is on purely administrative activities, and that is an area where we would like to make the process more seamless. Make their lives easier so we can drive more revenue through an advisor and help them grow their business.

Again, as I said, that demographic trend is going to affect all, right? It's, it's something we, we think we are well prepared for, because a lot of our advisors are also much larger. So their needs are going to be the needs of everybody, right? They need to scale. We are probably at the leading edge of that trend I would say at this point of time.

[00:06:51] Doug Heikkinen: Following on with that, with there being a need for more advisors in the future, many firms are moving towards paperless and fully digital operations. What innovations in digital workflows or client experiences have you found most impactful for advisors and clients?

[00:07:06] Mohan Gurupackiam: I think we start taking a look at why do advisor call us?

Our philosophy has been like, Hey, the best call is the one that you never get, right? So we take a look at this and say, how can we eliminate the need for a call, eliminate the need for an email, right? So our philosophy is two things. One is, as I said, eliminate calls. The other one is custodian agnostic solutions.

Almost all of the RIAs are actually getting into multiple custodians. And we are no different. And most of our solutions that we want to launch are custodian agnostic, right? And that goes a long way in how we are developing digital in our operation solution. I will talk specifically about a project that we are working on right now to completely, I would say, redesign our back office operating system. We did an analysis and we have identified 60 different areas where we have to develop workflows. I'll tell you, we are well into that journey. We have gone more than I would say, like we are close to one third of the journey there, but that is our philosophy.

Try to avoid firms, and we also want to bring in transparency into a workflow. An advisor should not be spending time trying to figure out, where is my request? That should be very visible, front and center for an advisor and their staff, support staff. Our philosophy is not only eliminate forms, but also eliminate calls and be custodian agnostic so we don't have to train people on five different things.

We train them on one single platform, and more importantly, bring them and give them the visibility and the transparency that they need, in terms of what they need to do.

[00:08:55] Doug Heikkinen: Speaking of data engineering, how do you see the role of data engineering and analytics evolving in wealth management? And are you making any investments in this space at steward Partners?

[00:09:04] Mohan Gurupackiam: I think I would say I started off this interior transformation offer, offer organization with the data. If I don't control data as an organization, there is no way for us to build anything. Data has been and will be a linchpin for us. Partly driven by our complex business needs.

We have multiple custodians, we have direct businesses, so we have to be able to bring in data from so many different sources. Be able to curate them in a single place, whether it's applying your asset classification standards, your capital market assumptions, right? so when we bring in the data, curate them in a single place, we have spent a lot of time, effort, and money internally to build a data hub, a single source of truth. We use market leading, platforms like Wove, WRI, to help get the data that we need to get into our environment. And our goal is to basically, and we are in the journey, we are starting off by bringing in next gen analytics platform.

these are what I would consider accelerators, right? I was just talking to an advisor at lunch right now, and he was talking about why, why cannot an advisor be a citizen data scientist? And to do that within the context of the existing regulatory framework, that's where we want to get to. Where we could allow for a citizen data scientist as an advisor, the advisors are getting increasingly in a technically sophisticated.

And be able to bring in these accelerators and next gen analytics. That is key for us. And again, we are well into the journey. We have been on it for more than a year now, and we have been, I would say we are probably in the phase three of three right now in terms of our data journey.

[00:10:53] Doug Heikkinen: It wouldn't be a technology conversation unless we talked about AI. And you recently rolled out an AI-based tool to help support advisors. What specific problems were you aiming to solve with AI and what's the early feedback you received?

[00:11:07] Mohan Gurupackiam: That's a great question. First of all, we went and looked at like, why are advisors calling us?

Why are they emailing us? And what we realized is they're looking for a particular piece of information. Throwing a 400 page policy manual in front of an advisor when they're looking for paragraph three of page number 376 is not a good use of their time, right? So if we wanted to bring in a solution that can actually efficiently look at all of the data, aggregate all of the data, and be able to provide that single piece of information, that bitesize chunk of information that advisor is looking for. Where are we using it? It's information access, as I said, that bite-size information. That's something that the advisor and the, admins are looking for. The second one is it's used effectively for training. When we launch a lot of new products, we have to be very cognizant of the organization change management.

So we try to basically use the whole stu bot as a, an effective training platform, a training tool. So it's easy for the users to adopt new technology. In terms of feedback, I would say first of all, great usage. We are seeing like, Advisors and their staff use its specific scenarios where they're looking for Hey, what is the minimum for my advisor account at this particular custodian?

Rather than looking at, as I said, a very large manual, they can look at that specific information. Ask that specific information, and they'll get an answer in two seconds. So that feedback has been fantastic. We also review, the. Questions we are not answering properly are the questions we are not at all answering, right?

So that gives us a viewpoint into our blind spots. What are we missing, right? My recommendation is if you're launching any sort of assistive technology, it's not a one and done project. It is something that requires constant care and feeling.

So we take that feedback loop in and identify our hotspots, but we also look at what is driving these questions? So if you have to do proactive training, in some cases, we try to do it. But again, the key to it is constant nurturing, right? Make sure someone is always watching it, make sure it's being nurtured effectively.

That's key to having a successful assistive technology in place.

[00:13:45] Doug Heikkinen: So some advisors worry that AI and automation could diminish the personal touch and client relationships. How do you balance the efficiency gains with AI, and then the need for human connection and wealth management?

[00:13:59] Mohan Gurupackiam: I'm going to shamelessly paraphrase what one of our board members said yesterday. The financial advisors are not in the business of selling financial products. They are in the business of selling comfort, right? That steady hand that takes clients through turbulent times. Which is especially true in today's market scenario. Is AI going to eliminate an advisor? I don't think so. I do think what we've also seen is as the needs of clients get more complex, they need more well-rounded advisors to help them. So we, my personal belief, I don't think AI is going to replace the advisors.

It eliminates some of the lower end work for an advisor, but replacing an advisor? I don't think so. I think our philosophy has been to augment the high touch advisor experience with high tech tools, right? So use technology where we need to, but ultimately the focal point is always going to be the client and the relationship with the advisor that I, we think is key.

And I think the more important part is, align AI to where the max benefit is for our advisors. That's one thing we are very particular about. We go and ask people, where do you want? And I would say one of the areas we are hearing time and again is investment research. That is an area where our portfolio construction. There are not a lot of, I would say, products or platforms in that space that use AI effectively. Trying to look at AI through the eyes of the advisor, understand in a, where it'll bring benefit for them. That's important. And we are also committed to having what I would call as an advisory driven AI roadmap.

Granted, they're not technology savvy people, but they know what they want. So that's what we have been looking at in terms of, how we would bring in advisors and AI together into a single ecosystem.

[00:16:03] Doug Heikkinen: So I think we've talked about AI enough, and I'm going to broaden the next question. Looking ahead, what emerging technology capabilities do you believe will have the greatest impact on the advisor client relationship in the next five years?

[00:16:17] Mohan Gurupackiam: I think you're looking at some sunrise sectors, right? Market research, as I said, I briefly touched upon, especially when it comes to sentiment analysis, being able to look at real time data. I've seen some prototypes, in a startup firms, but that is an area where we do think there will be advances. Portfolio construction, there is an appetite, especially in this stubborn market. Everyone is chasing the higher alpha. They need that small differentiator that will make them better than their fellow advisors. Testing investment hypothesis using gen AI. Gen AI is not widely adopted in financial services yet.

It is used more broadly in manufacturing industries or heavy industries. But gen AI, I do think there is a possibility where, gen AI can significantly improve testing of your investment hypothesis, right? Be able to validate your assumption, right? It should be very easy for an advisor to say, Hey, I wanna take my portfolio, run it through the past five revision cycles, right?

They a very, I would say like verbose way of interfacing with a portfolio construction or a back testing tool. I do think there is scope for it right now. Sure, the advisor can do it. It's going to take them like 24 hours of prep to do it, right? So being able to eliminate that, that I do think is important.

And lastly, opportunity analysis, being able to find that nugget, oh, take in bits and pieces of data that are, I think are completely unrelated. And being able to put them together. Like for instance, if somebody's adding a new beneficiary into an existing account, we should be able to say, oh, you might want to talk to them about if it is a minor, be able to open up a minor account or a 529 account.

So things like this, being able to use more sophisticated mathematical and analytical models and use it for opportunity analysis. Yes, I do think there is a lot of opportunity there. Operational efficiencies. There is still like a lot of inefficiencies when it comes to back office operations and it is in our interest.

And I do think like Steward is ahead of the curve in this particular area. We know we have to improve and we have been working on it. So that is an area where we do think there'll be a lot of advances, especially as it pertains to financial services.

[00:18:55] Doug Heikkinen: All right. Last one for you.

[00:18:56] Mohan Gurupackiam: Sure.

[00:18:57] Doug Heikkinen: With your extensive experience at industry leaders like E-Trade, Satera, AssetMark, where you've been, what lessons have shaped your approach to technology and innovation at Steward Partners, and how do you foster a culture that embraces change and partnership?

[00:19:12] Mohan Gurupackiam: So I gotta tell you, this is a question where I have to take a few seconds to reflect myself, but I'll start off with, listening is probably the single most important quality of leader. I think that I will start off with like leadership lessons. Listen to your advisors, listen to your staff.

Listen to your recruits, right? That's always number one. Number two is stay abreast of industry trends, right? We always have a saying, trend is your friend, right? Write it. Don't try to fight it. Right be, be always up to date on what's happening in the industry. A lot of the advances in the industry, a lot of decisions are being driven by trends.

And don't look at technology for the sake of technology. Try to maximize benefit for the advisors and their client, right? I always say drive innovation through the eyes of your advisors, end users, clients. And last but not the least, stay humble and stay nimble. I think that is the leadership lesson I have learned in the ever changing technology ecosystem.

Stay humble, keep learning, and stay nimble so you can advance along with the changes.

[00:20:33] Doug Heikkinen: Mohan, it's always fascinating listening to you and getting your perspective on a number of things. Thank you for joining us.

[00:20:39] Mohan Gurupackiam: Thank you, Doug. Much appreciated. Thank you. Bye-bye.

[00:20:42] Doug Heikkinen: To learn more about Steward Partners, please visit stewardpartners.com.

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