Today we talk with Denis Konoplev, co-founder of paraplanner.ai, an AI tool for advisors to use in place of a traditional paraplanner.
In this show we talk about Denis’s journey from a financial planning client to creating AI technology for financial advisors. We discuss where AI makes the most sense in an advisor’s workflow, and where a human advisor is absolutely essential. If your an advisor curious about how AI can help you save time data gathering and processing data, then this episode is for you.
Transcript
Denis Konoplev: So I had some success with my previous startups and obviously, I turned to a financial advisor. I wanted to turn to a financial advisor. That’s it. Help me figure out the bigger picture of the plan. And, I think a common misconception for a lot of people, not in industry is you go to a financial advisor, they tell you what stocks to pick and that’s it.
But I came to a financial advisor because I wanted a holistic plan put in place that would help me figure out. The big events in life, what happens when I retire? Do I want to retire? What does retirement look like for me? Kids, family university, college can I travel more and leave something leave something behind for other people when I’m gone?
And I found an amazing financial advisor. We clicked [00:04:00] straight away. I came looking for the advice, but stay for the relationship. And it was actually because of that, that we nearly had a falling out because I had a couple of situations come up where. Sent emails, tried to reach him on the phone.
And I think it was two weeks that I was waiting for a response. I never heard back. And instead of being upset about the situation, we actually sat down and I asked him, out of curiosity, like what’s going on, I thought we had a thing here and he was like, look, let me show you.
And it was when we actually dug in, I realized how much happens behind the scenes to have. Outside of client meetings to provide advice and it dawned on me a lot of these tasks that this advisor was doing could be automated or delegated, taken off their plate. Because from my perspective, at least the real value of an advisor is being able to sit across from a client and guide them through some of life’s hardest choices and hardest [00:05:00] decisions.
To me it’s a relationship like with a coach and even to a certain extent, like a. Psychiatrist because who else do you go to talk to about money? It’s, a taboo subject. You don’t necessarily always discuss it with with your spouse and close ones. So the goal here was to free up financial advisors of, stuff that happens behind the scenes, the back office tasks that keep them from their clients and focus on what humans are amazingly doing, which is being human for the rest of it.
We could maybe figure out how to leverage technology and Like traditional technology, some traditional automations, but also leverage AI to make advisors more efficient, free up more of their time so they can spend it with their clients.
Jordan Haines: So the why behind this whole thing is, I want to have a relationship with someone. I want a human being to give me human guidance. I want the human being to understand my situation. And the number one thing getting in the way of that is all this back office administration type of things. And [00:06:00] that’s that’s a very all encompassing category that I’m saying there.
Like it’s preparing plan. It’s just executing things. It’s doing this stuff. It’s translating data into new tools. And you saw that as an opportunity to free up the advisor, to do more of the human things, respond to an email, respond to a phone call, have a conversation with you. Is that right?
Denis Konoplev: Exactly. Exactly. At the end of the day that’s why we’re here for, because if you remove that component for a second, if you say let’s remove the human, you’re talking about just, Me speaking with a machine and don’t get me wrong. There is definitely a need for like accessibility purpose to have like digital only solutions.
Financial advice in its current form and relationships, they don’t scale. So there is a, definitely a place. And obviously, younger generation is very digital first and digital forward. So there was definitely a need for solutions like that. But I think a lot of people like myself turn to a financial advisor [00:07:00] because we want to talk to someone and we want someone to be there to pick up the phone, especially in a time of need in a time of stress when you’re making like a really major or potentially a major life decision to have someone there for you.
Jordan Haines: that’s, and it’s fascinating hearing this come from an AI guy, right? AI, you’ve been using and interested in this space for a long time. And what’s interesting is you’ve gotten into this industry because you wanted that human advice, which I think most advisors understand. I think deep down, we know, there is a role that AI has.
It’s, is it going to replace the relationship? No. And I remember thinking this early on, when I first got into this industry I sat down with a couple of advisors and one of the advisors said, you know what, it doesn’t matter what happens in this world. I am going to spend I’m going to do what only I can do, which is meeting and building relationships with other and whatever we do to help people do that.
I think that’s fantastic
.
Jordan Haines: So tell us about what you built then. I know you’re really you’re still pretty early stage with the tool that you’re building. You have a couple pilot advisors. You’re testing some things out [00:08:00] with but tell us about pair planner AI, what it looks like and what you’re trying to do with it.
Denis Konoplev: paraplanet
service. We use an AI augmented paraplanet to help financial advisors with a lot of the heavy lifting. We realized that one of the big chunks of work or one of the really big things that takes up advisors time is a plan preparation updating financial plans, but also moving data between different systems in order to actually make decisions.
Create advice and create a plan. So we focus specifically in on that component of it. And I think, this is something that we realized. AI also couldn’t solve in its entirety and that you also need a human in the loop. There’s, it’s similar to how financial advisors all the human in the loop towards clients.[00:09:00]
We realized that we need a human in the loop towards financial advisors because we have financial advisors who message, who call our power plants to explain what’s going on, what’s troubling them. And it’s a lot quicker and a lot more efficient and a lot more There’s a certain element of trust as well involved in delegating work to a power planner.
Like we wanted to put a human up front, but in the background, we use different types of automations to speed up and make that power planner actually in terms of the benchmark, 20 times more efficient than a human without these AI assistive
Jordan Haines: Yeah. So even in your approach of the pair planner relationship you’re finding, Hey, what are the areas that we need the human interaction with an advisor? And what are the areas like, We technology is a completely well suited for. And those are the areas that we’re going to build versus the human interaction.
That’s still important. And we need to leave. We need to still have that as an opportunity, but we want to be able to balance this out. We had our first [00:10:00] CTO David Weiss and those of you listening, if you go back to the very beginning of elementality, some of our first couple episodes, there’s, I think it’s episode eight or seven or something like David Weiss has interviewed and he talks about the role of technology. And how we need to think what are the things that humans are uniquely suited for versus what are the things that technology is uniquely suited for. And frankly, in my experience, working with advisors, sometimes the two of those are conflated.
Sometimes we know it’s we know deep down that we work with people that want to work with human beings. But then we go and we build systems and processes and automations the thing that they never wanted to not have human being interact with them. They didn’t want a robot to talk to them.
They wanted the human being there. And so I think it’s, I think what you’re telling me is that as you built this thing and as you’re entering this industry you’re thinking, what is the human uniquely suited for? What is technology uniquely suited for it? And let’s. Keep those two things separate in some cases.
Denis Konoplev: Correct. Exactly. There, there are some things that humans are just better at than technology. And whilst, we’ve [00:11:00] all seen like chat GPT mimic and behave almost human there is just something that is missing there and something that just will never be replaced. Being new to this industry something that you mentioned where I realized that there is this underlying I wouldn’t necessarily call it a fear, but a concern that, AI will replace us like a lot more about the robo advisory.
Should we say challenge or fear that like the robo advisors are coming after us in that past, I think this too shall pass. I firmly, even like you said, as an AI guy, I don’t believe that advisors will be replaced by AI.
Jordan Haines: I love that. So what types of advisors are you working with right now? If I, we work with a variety of different advisors here at elements, but as you’re thinking about what are the types of people that would use your service the best as it exists today, what are the types of people that you would want to see using pair planner to AI?
Denis Konoplev: Yeah. We started our [00:12:00] journey working with, solo and independent practices. We felt that given the amount of resources, extremely large enterprises have, They have a naturally unfair competitive advantage and that a lot of small practices could benefit from the service.
So that was our initial focus. We’re still very committed and still have many solo practices that we support. We have started to grow and expand the tools. So supporting small and medium sized firms, so between 20 and 100 advisors. And we’ve also learned that beyond just the need for Paraplanet or AI, they have other kind of like challenges and adjacent challenges that stem from that.
So one of the challenges that we’re trying to figure out how to solve right now, it’s, obviously, As a fractional power plan out, we could only be as good as the data that we get. The midst of launching a solution that actually helps the [00:13:00] devices collect data even more efficiently than ever before with in a much easier way, and it actually helps enhance their existing client relationships and the way that they think about data.
This product hasn’t gone live yet. It’s still in in private testing. But yeah maybe for another time, I’d love to show you, share more about what this product does.
Jordan Haines: Yeah, we’re excited to see that come out and we can talk more about it then. So in your mind, it’s, there’s efficiencies that might need to be had and whether I’m a small solo advisor or a large institution where I need to navigate this data landscape, that’s messy and there’s inefficiencies. Those are the types of people that would, do well with paraplanet.
ai love that.
Denis Konoplev: This is actually one of the reasons why, you know I love I love what you guys are doing at Elements in the first place because I think Many people will agree one of the big challenges in this industry is the fragmentation of the tech [00:14:00] stack, and a lot of efficiency is lost because of that fragmentation.
And we would normally expect client data to have a home somewhere in that tech stack, which would typically be the CRM. But I think the amount of data. That exists and the complexity of it, there is no central home for that data anymore. And one of the things that really excited me about elements from the first time that I stepped foot in this industry, elements was the first company that stood out to me as a thought leader.
And I love the fact that you guys are working towards, becoming a central hub for the client data to live in, to feed, a vibrant ecosystem for startups like us. That, that can feed off of that and do more and deliver more value to advisors and save more time.
Jordan Haines: Yeah. What you’re describing, let’s pull on this thread a little bit. Those of you who have listened to the past may have heard me talk about this. Data gathering is my favorite part of our industry, which is so I don’t know if there’s other advisors, I haven’t met one [00:15:00] out there that actually likes data gathering the way that I do, but it can be, it’s such an undervalued.
Part of the process when we’re meeting with clients. What’s it, what’s been interesting to me is I’ve at a macro level, looked at our industry and the way that we deliver advice and the type of people that we work with and how those things are changing what I’m finding that regardless of a client’s age regardless of their quote unquote tech savviness, regardless of their background people have a desire to know what’s going on in their financial life.
By that, just have their hands wrapped around it in some way, can understand cognitively what’s happening in my life now, whether or not they like need to understand the intricacies of the financial system. I don’t think that matters, but they just want to know where they’re at. How are they doing?
Are they doing okay? That, that, that broad, overlying and underlying question to a lot of the things that we talked to clients about. And. In order for clients to feel good about that they need to have some degree of ownership over their financial data, right? Like they need to know how to access it, how to update it, where it’s going.
And what we have essentially done as an [00:16:00] industry is we’ve said, Hey, we are the arbiters of truth, right? So you mentioned this advisors hub in most situations is the CRM. And that’s not bad, right? That’s a place that I can go to reference and see what kind of things that I talked to this person about.
What have we said, basic demographics. Sometimes I have financial data, but clients don’t have access to that. And that’s a scary thing for me if I’m a client, because I want to know what’s going on in my life. I want to be able to check in when I want to. And as the advisor, frankly, there’s a huge inefficiency in that.
And I know that you probably care about this because if I ever need to update this data then now I have to go reach out client and now I have to ask them for it and then I have to go in, I have to make sure that it’s the right piece of information. Whereas if I were to just train the client and say, Hey, we have the system. It’s pretty basic, pretty simple. All you need to do is download an app. Fill out some information and it will keep it updated every so often. I’ll check in every time we need to talk. Just going to ask you to update a few numbers for me, but that’s going to be the central hub. And I’m going to reference that in our conversations and you’re going to reference that in our conversations, the inefficiency of having two separate hubs.
Which right now there’s not really a clear, like you mentioned, a clear client hub. [00:17:00] Sometimes it’s the planning software. Sometimes the client’s head. There is a clear advisor hub, but they don’t, they’re not the same. And just having those on two different platforms is completely inefficient. And it’s it’s scary for me, honestly, when I want to manage a relationship.
That’s, I’ll say this is my pitch for elements. The nice thing about elements is that it does exist there and my clients can see it and they know what’s going on and I can ask them to double check on it. And whether or not they ever download the app, it’s all there. It’s in one place and I can reference that ongoing basis.
Anyway, there’s my a little high horse. I’ll get off my pedestal. I’ll come down and we talk about this. I’ll let you react to that. If you have any other thoughts on it. Thanks
Denis Konoplev: Yeah, I do. So I, I think that many people don’t realize that this visibility that you’re giving with elements is something that historically has been reserved for the ultra high level of clients. I’ve seen dashboards I’ve seen like custom built software that gives the extremely rich elite of this world [00:18:00] a visibility on their finances.
In some cases close to real time that it’s just not accessible to afloat, like the general market is reserved for, the 1%. And I love the fact that you guys are democratizing that visibility, democratizing that access, which has previously been reserved to the 1%.
Jordan Haines: for that. I, accessibility has come up. It seems to be the theme of the month for me right now. And honestly, the year is accessibility, both in the types of clients we serve, but in the, even my high net worth clients, advice is still not that accessible for a lot of people. It’s not accessible even when they’ve hired me.
And so what can we do to increase accessibility, make it easier for people to interact with their advisor? I think that’s the theme talk to me then as we finished up here, Dennis. Um, I feel like in, in this industry, things are changing pretty rapidly specifically around how advisors deliver advice and how [00:19:00] clients want to receive advice. Zeroing in on that specific thing, how do you feel if you were to say 10 years from now, or the advisor of the future, how is the delivery of advice changing versus and or how our clients demanding a change in how they receive advice? Does that make sense?
Denis Konoplev: Yeah. It’s from at least what I’m seeing, even talking to advisors. Clients are demanding more from advisors than they ever were before. You’ve got so much content, so much education, which is obviously fantastic for like the end clients, but it is putting an additional stress and a strain on advisors.
I think it does come down to this is something that this is why I hone into the human element. You can have. amazing advice. You can have extremely complicated complex financial plans and strategies. But at the end of the day, if the client doesn’t accept that, then it’s for [00:20:00] nothing.
What I’ve seen top advisors spending more time on, and this is the kind of, I think the real insight in this industry by freeing up Time for advisors from these middle and back office tasks. It’s not just to spend more time with their clients. It’s not just more time to build relationships with the clients.
It’s also time to learn how to dig into the psychology behind money. And some of the best advisors that I’ve had the pleasure of interacting are closer to behavioral science experts that help navigate that journey for clients, both in terms of Receiving or extracting what the client actually wants to achieve, but also the acceptance of the advice that is delivered.
So I really see the shift in the industry, at least from my naive perspective, going towards focusing on that behavioral. aspect [00:21:00] behavioral when it comes to money and acceptance of advice and spending more time there and then letting technology, computers, AI, whatever flavor of technology comes out in the future, do the heavy lifting on the stuff that it will never be able to do when it comes to that client relationship.
Jordan Haines: Yeah, I think what you’re describing is just advisors are leaning even more into this human characteristics. Like I, if I were to relate us the closest to any sort of professions, the two professions that come to mind are like therapy. And medicine, right? very similar to those two. Medicine is very prescription focused.
Here’s the things that you need to do. That’s, advisors from an analytical perspective, we do that. But then from a therapist perspective, there’s the emotional side of things. And when I look at both of those, if I look at a physician and I look at a therapist. Almost entirely their entire job is in front of patients talking to people as a therapist, I’m spending very little of my time analyzing reports and intake surveys outside of it.
I’m spending most of my time talking to the human being [00:22:00] as a physician, go ask your family practice doctor. Next time you see him. How many patients do you have right now? And do you see in a year? It’ll be in the thousands, right? And advisors were in the hundreds. Okay. How is that? That’s because they have leaned into the efficiencies and they’ve leveraged technology and other people that are specially trained to do things so that they can focus their time on being with the patient.
And I think that’s, I can’t agree with you more that the advisor of the future, the way that we deliver advice is going to be that human element. People hire a human advisor to receive human advice. And so, there’s going to be AI, there’s going to be tools like what you’re creating that are going to do an even better job at the analyzing and all the stuff that happens behind the scenes.
So I’m going to do a better job and I’m going to learn that side of things, but just becoming a better human and learning how to navigate those conversations. So I couldn’t agree with you more. I think it’s fantastic. Anything else you want to add with that?
Denis Konoplev: No I think I think you’ve hit the nail on the head. Humans, like humans are better at being human. And there’s many things that humans are better at than machines. And so we should just move some [00:23:00] things to machines and focus on what actually makes us human. And it’s the relationships with clients that advise us build.
That’s our focus. That’s our belief. And in the end, like when you look at it and zoom out from a macro perspective, I’ve seen many different numbers in terms of how many Americans are looking and seeking financial advice. And one of the big factors is obviously financial advisors are overstretched and it’s not just about getting advice, it’s getting advice that’s human.
Our hope is that More people can access financial advice and advisors can spend more time building those relationships with people and less time, doing manual data entry and doing things that machines are better than us at doing.
Jordan Haines: Yeah, that’s the theme here. More advice, more human interaction. That’s what we want more of. Dennis closing us out here give us your plug. How do advisors get in touch with you? How do we learn more about what you’ve built? Lee, take it from here.
Denis Konoplev: Yeah, of [00:24:00] course. You can visit our landing page, paraglider. ai. We are, uh, open to connecting, having a conversation, even about topics about AI, because I know that it’s very new for many financial advisors and people are still trying to figure out like the context of it within their practices.
We super happy to support advisors. And
Jordan Haines: Okay. Love it. Thanks Dennis for coming on and hopefully we’ll have you on later.
Denis Konoplev: thank you so much.