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Charles Schwab is expanding its push into artificial intelligence, bringing Anthropic’s Claude for Financial Advisors directly into Schwab Advisor Center. The company says it is the first RIA custodian to offer Anthropic’s advisor-specific AI to independent firms. Alison Dooher, Head of AI at Schwab Advisor Services, joins Bloomberg Businessweek Live from Schwab IMPACT Summit in Boston to discuss how AI is changing the financial advice landscape.
You know, AI in the financial space just over the last couple of years are coming to impact. Wow, it has really upped in a big way. And you guys made a bunch of announcements. Talk to us a little bit about what you are doing. There’s a booth right over there, Nevas, that is relevant.
Um, tell us how AI is penetrating your world.
Yeah, well, first of all, thanks so much uh for allowing me to join you guys this afternoon and it’s it’s apropos. Uh today we are calling uh today Impact as AI day. Uh and we started the day with three pretty big announcements.
Um, you know, the the first one being is that our connector into Claude for financial advisors, uh product developed by Anthropic launched this morning. So advisors can actively enroll, um, and set up the Schwab connector and then they can ask natural language questions, um, across their book of business and gain insights.
Can you explain how that’s different than just me? Like, I’ve played with Claude for portfolio construction for example and like for budgeting and stuff. It’s just fun to do to give it information and it try to tries to spit something out for you. How is it different than sort of the regular off-the-shelf Claude?
Yeah, so it it’s it is an important distinction. So the connector is really designed to uh provide authenticated access to client data for advisors. Um and so what that means is that as they enroll in the connector, um their their security teams at their at their firms will then permission each user. And the access to the client data is only authorized the same that it would be as if you were accessing Schwab systems very directly. So you only see what you you are permissioned to see, which is really important. Um, the second piece is that you’re now getting live access to that data. So you’re not actually transporting the data yourself. It’s actually just calling an API and coming in through the system directly, allowing you to give the right context and allowing you to write ask the ask deeper questions.
Why Claude and and why not go with uh Anthro- or OpenAI and and chat GPT?
Yeah, I mean first off, Anthropic’s been a great partner who’s been thinking about the wealth space for uh quite some time. And so I think the timing was just right. When I talk to advisors, um, Claude is the predominant LLM that we were hearing from advisors. That’s not to say it will be the only LLM that we we integrate with into the future.
But there does seem increasingly, Allison, a distinction between OpenAI and Anthropic when it comes to security concerns. And, you know, I’m just curious how that plays into it. When you’re dealing with anybody’s money, right? We are are concerned about what could go wrong possibly. And certainly, it’s a little bit heightened over the last couple of weeks because of some of the breaches. So, I’m just curious, um, how that plays into it.
Yeah, I I I I I’ll I’ll leave it with this um pretty simply is that that that’s one of the reasons why the connector is built the way it is is to ensure that we are really doing permissioned access to data over um transmitting it in any other way.
So, when you hear from RIAs, I mean it’s like become routine for me to say this, but the pace that things are changing is just so remarkable. I mean, I don’t think we were talking about this at impact last year. Um maybe use it you know, maybe to a different extent, but like the idea of it seems like so routine that an an RIA would be using an LLM in some way at this point. When you hear from the RIAs, how are they using it versus how you think they should be using them?
Yeah, so well, it it’s actually a good question. So I think about a year ago, we were looking at about a quarter of advisors who had said that they had really successfully adopted AI. and it’s it’s it’s above 80% now. So certainly the adoption has probably outpaced kind of what we’ve seen in any other kind of technology advancement in previous years. Um,
What’s adoption versus, you know, does that mean they’re just playing around with it or versus creating an agent to do things? Because my understanding agentic AI, um, RIAs are being very careful about that and holding off.
Rightfully so. Um, and so, yeah, so I think um what what we’re seeing is, you know, a year ago, it was a lot of summarize my email, maybe draft an email, right? And and and now there is definitely more exploration. And what I really like about where advisors are being thoughtful is they’re thinking about the problem and our opportunity first and foremost. They’re not they’re not applying AI for the sake of applying AI. And so that’s one of the things that I think uh advisors do really well. They’re keeping their clients kind of first and foremost in terms of how they’re serving them, what their services they’re developing. And so that’s how we see them approach.
Do you get concerned at all that with the rise of this technology, the the advisor won’t be needed as much as in the past?
We’re firmly in the camp that really says that AI will assist the advisor. If you think about the amount of administrative work that goes around kind of developing and cultivating um and um your client relationships. The fact that you could kind of take so much of that administrative work really out of that process, that just allows you to lean in more personally with your clients, take a bigger role in more parts of their lives. Um, we don’t see clients reaching out for
Okay, that’s that’s my question because it’s it’s like if you can ask Claude about your portfolio construction or the the right asset allocation, then does it mean that some of the value proposition of a human being on the other end is taken away?
We hear it time and time again. Will people consult an LLM for financial advice? Yes, but when the decision really comes down to it, they want to talk to somebody they trust, and that’s their advisor.
Sounds like I’m talking to somebody in medicine right now. It’s the same thing, right? Like, how many of us have have asked one of these LLMs about what why is this thing hurting, you know, and then gone to a doctor and gotten another answer.
So, so I I found out. So, Nevas is going to help with a lot of operational, right, tasks and stuff. And so I’m assuming that that then frees up an adviser to actually have more one-on-ones with their clients. I mean, that’s part of it. Get rid of some of the routine stuff that can be dealt. Is that?
Yeah, so that that’s definitely what prompted um some of our strategic partnership with Nevas is that we’ve we’ve been we’ve been talking to them for about a year now. Um they are a relatively uh new company, but as we’ve watched them mature and how they approach, we’re just very aligned in the value that we can both bring to advisors. And we believe about it in two ways. First is absolutely a schwab going to build and provide services directly. Um, and some of some of that directness is is actually also one of the other announcements we did today, which is launching Ester Wealth.com’s tax and estate planning agent in SAC because we can now bring it, like, what’s a traditionally complicated topic directly to advisors through our platform. But but the second piece is really the ecosystem and the broader RIA technology space. Um and Nevas just fits this role in terms of really being dedicated to taking that administrative work out of the out of the cycle.
This is happening really fast.
It’s happening really fast.
This company started in 2024. That’s how fast this is happening. This is like two years old.
I know. I was just kind of blown away. I have to say, I think it was a couple of years ago where someone’s like, want Schwab to like create an AI bot or something. And look at it all.
