Note apps that generate action items

Our US correspondent delves into the details of AI and the use cases it has or could have for the wealth management, banking and family office sectors. In this rapidly evolving field, a number of important topics are addressed in this article.

Geoffrey Hinton, the computer scientist known as the “godfather of artificial intelligence,” recently warned us about 60 minutes He is very concerned that AI could probably become more intelligent than humans and “take over the world”.

Famous futurist Ray Kurzweil says that by the time children born today are in kindergarten, AI will likely have surpassed humans “on all cognitive tasks,” ushering in the new age of artificial general intelligence.

Meanwhile, a not particularly scary but extremely handy and time-saving AI app is taking the financial advisory industry by storm: software that transcribes and summarizes meeting notes with clients and then feeds action points into CRM applications for implementation.

According to Josh Brown, CEO of Ritholz Wealth Management, who recently moderated a panel discussion on AI hosted by the Museum of American Finance and Betterment, note-taking and action item apps have become the most popular “use case” for artificial intelligence among financial advisors so far.

“This is a massive scale proposition,” Brown said. Industry guru Michael Kitces, co-founder of the XY Planning Network and editor of the Kitces Report, said he “wholeheartedly agrees” with Brown’s assessment. In just a few months, using AI for meeting notes “has become a hugely valuable resource for us,” said Tony Blagrove, CEO of Traveka Wealth.

Venture capital funding is pouring in
In fact, the phenomenon of AI note-taking and action item apps has exploded in the last six months alone. None of the most popular of these apps, including Jump, Zocks, Grain and Finmate AI, have even been 2024 T3/Insider Information Advisor Software Surveyreleased at the T3 conference in January in Las Vegas.

Since then, dozens of startups have begun launching AI-powered note-taking apps as “assistants” – and attracting major venture capital investments.

Earlier this month, Jump announced a $4.6 million funding round led by Sorenson Ventures, with participation from Pelion Venture Partners and several angel investors. In February, Zocks received $5.5 million in seed funding from Light Speed ​​​​Venture Partners, according to CEO Mark Gilbert, a former executive at Twilio, the San Francisco-based cloud communications company.

In general, AI-powered note-taking and action item apps record and transcribe customer conversations and create summaries, to-do lists and compliance records that can be integrated with Zoom, Microsoft, Google and CRM applications such as Salesforce, Redtail and Wealthbox.

Each product, of course, has its own unique features, and XYPN recently published an excellent description, ranking and comparison of the leading apps, detailing pros and cons and pricing ranging from fees of around $39 to over $100 per month per consultant.

Reduction of post-meeting time by 70 percent
John O’Connell, CEO of technology consultancy The Oasis Group, points out that financial advisors can spend up to an hour after each client meeting entering notes into their CRM, summarizing the meeting and generating action points for the team. He estimates that AI-based note-taking apps can save advisors up to 70 percent of that time.

Not surprisingly, consultants responded enthusiastically.

After trying “quite a few” AI-based note-taking apps, Mike Reynolds, head of Elevation Financial in suburban Indianapolis, said that after using Jump for the past four months, he was able to “be more present in client meetings” and no longer have to worry about missing something important, resulting in a “better experience for the client.”

Zocks user Katie Lindfelt, a financial planner at Sequoia Wealth Advisors in San Jose, California, said the app is “very easy to get started” and allows team members to “clearly share notes, take action and follow up.”

Although AI note-taking app Fathom is not designed specifically for financial advisory firms, Silicon Valley-based Blagrove likes the fact that Fathom works well with Salesforce and has been highly rated by Zoom as an approved provider. “The biggest value-add,” he said, “is the ability to document everything that’s been said and everything we do. That way we can prove our value and justify our fees.”

Reservations due to data security and data protection
There are of course limitations.

Obviously, most apps cannot be used to record phone calls and require either the use of a Zoom-like connection for virtual meetings or a connection to a laptop or speakerphone for in-person meetings.

As with any AI product, human oversight is required to verify accuracy, and the software’s ability to clearly recognize and distinguish individual voices may not be perfect.

However, the areas of data security and data protection are by far the biggest concerns.

“Confidential customer information is being recorded,” Blagrove noted. “It’s like inviting a stranger to a face-to-face meeting. You need to be sure of data integrity and security and check the vendor’s audited security policies.”

Blagrove recommends that consulting firms conduct a basic Silicon Valley due diligence before signing a contract: a Systems and Organization Controls 2 (SOC 2) report. This is an independent assessment of a vendor’s ability to securely manage client data, issued by a certified public accountant or other independent third-party auditor.

“Many software contracts favor the service provider when it comes to data security and the use of your customer’s data,” O’Connell emphasized.

Cloud, compliance and longevity
“The data needs to be backed up in a private cloud,” said T3 President Joel Bruckenstein, one of the financial industry’s leading technology consultants. “But I worry that small firms may not be able to ask the right questions. If they don’t fully understand how the data is being used, they shouldn’t be using these apps.”

In fact, O’Connell said, Oasis has found that larger consulting firms are not implementing AI apps “while they are investigating the compliance and cybersecurity issues associated with these solutions.”

Bruckenstein pointed out that AI software is still “a very immature market,” which he compares to the robo-advisor market that emerged a decade ago. “Two-thirds of the robo companies have been displaced by established companies and no longer exist,” he said.