Episode summary
Will AI Displace Financial Advisors? | Animal Spirits 455
Animal Spirits
· · 46 min · Hosts: Michael Batnick, Ben Carlson · Guests: Michael Kitces, Phil Huber
Summary
The hosts led a live Future Proof discussion in Miami centered on two investor anxieties: whether AI will displace financial advisers and whether private credit is becoming a bubble. On AI, they argued that the technology will make advisory firms more efficient, but that efficiency has historically not translated into lower fees or radically higher client loads. Michael Kitces pushed back hardest against the threat narrative, saying technology mostly changes the mix of work, not the need for human advice, and that firms tend to use freed-up time to deepen service rather than add many more clients.
The private credit segment was more skeptical in tone but still constructive. Phil Huber argued that much of the recent media backlash conflates ordinary credit-cycle risk with a systemic blowup, and that defaults, while real, are still below levels implied by the headlines. He said the asset class has long had dispersion between strong and weak lenders, that software exposure is a legitimate concern, and that liquidity management matters more than sensational articles suggest. The hosts ended with a roast segment and then announced that a new white-labeled chart-report product would use Ben Carlson’s writing on the Exhibit A platform.
Key takeaways
- Michael Kitces argued that AI is more likely to change advisory workflows and service depth than eliminate the need for human advisers.
- Kitces said the industry’s median fees, overhead, and margins have barely changed over decades, even as technology has improved.
- Kitces said client loads have fallen materially because advisers use efficiency gains to go deeper with existing clients, not to add unlimited new ones.
- Phil Huber said private credit is not in a bubble and that recent negative headlines are overstating ordinary credit-cycle issues.
- Huber said software is the largest sector in the index and that lenders have historically liked it because it has had relatively low default rates.
- The hosts announced a new white-labeled monthly chart report built around Ben Carlson’s writing on the Exhibit A platform.
Notable quotes
“There have always been do-it-yourselfers, right? We've all spoken to them. Most of the time they don't become a client”
“the only thing that's actually shifted is client loads went down because we do more services”
“there's a difference between a bubble and a credit cycle. And I think this term bubble gets thrown around so much these days”
How the episode opens
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Visit tukrim.com. Click the link in the show notes for more. Welcome to Animal Spirits with Michael and Ben.
We're live from Miami.
That's right, Ben. — It is I don't know what time it is. It's the afternoon. We recorded a live Animal Spirits at 11:45 a.m. And we tried to do something different this time. — We did some AI stuff. Listener email sparked that conversation. Listener email sparked a roast. Ben and I roasted each other. This guy told me that I say, what do I say a lot?
Anyh who.
Anyh who. And I said, you know what? Let's roast each other.
I don't know that I say any who, but I take his word for it. I believe it. Um, and I thought I thought the jokes were okay.
I mean, listen, we're not professional comedians. Obviously, Ben's certainly not. Um, and I'm told so we couldn't hear it and we couldn't hear it on stage, so it was like pretty awkward that it's it felt like they landed like with a thud, but apparently there were some laughs.
We just couldn't hear it.
Yeah. The wind just carried them away. — Yeah, it was the wind. It was it wasn't our jokes. — I blame the wind. So anyway, we're doing an intro because um it's Monday and last night at dinner, — The futures market opened and the only thing that people cared about was um crude oil futures.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai and financial advisors
- wealth management business
- private credit crisis of confidence
- financial services technology
- roast segment
Companies and tickers mentioned
- Ritholtz Wealth Management
- The Compound Media
Watch the episode
Watch “Will AI Displace Financial Advisors? | Animal Spirits 455” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Animal Spirits, this episode and its artwork belong to The Compound. Octagon is not affiliated with the show; this page is an independent summary.
