Shaping Wealth Develops AI-Powered Behavioral Finance Assistant

Shaping Wealth, a company specializing in behavioral finance training and helping advisors understand the psychology of financial planning, has created an artificial intelligence-powered assistant to help advisors understand the emotional needs of their clients. The company developed Lydia, the advisor-facing AI program, with Alai Studios, a technology development firm, and it’s currently demoing the tool.  

Andrew Smith Lewis, Alai’s CEO and founder, also developed CAIS IQ, a proprietary alternative investment education platform. He said Alai began talking with Shaping Wealth about creating the AI program using several different large language models about six months ago. Once the companies officially launch Lydia, it will feature a customizable front end. It will be available as a web application and an API embedded in existing enterprise applications.

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Smith Lewis said Lydia is not a “chatbot,” but rather an “expert agent” with a “deep personalization technology stack and the ability to learn and remember.”

Brian Portnoy, Shaping Wealth’s co-founder, said once Lydia is widely released, it could live in programs including Slack, Microsoft Teams, Salesforce or a firm’s proprietary technology stack.

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During the planning stages, Portnoy said the team developing Lydia quickly realized this technology and his firm’s existing content “would play well together.”

“Lydia is the skin for a series of conversational agents,” he said.

Portnoy said those discussions would include advice on navigating difficult conversations, behavioral marketing and the connection between money and happiness.

“It’s our job to upskill the advisors to go deeper with their clients,” he said. “(Lydia) is a behavioral marketing agent that can help you write blogs and emails and be a conversation partner.”

After the companies complete the beta testing phase, Portnoy said Lydia will be available both as a standalone and an enhancement to the company’s existing products.

Scott Lamont, managing director at F2 Strategy, said Lydia fits with other AI tools firms have rolled out to advisors “who are interested in the capabilities that AI can offer but are not looking at it as a replacement.”

“The clients are still going to want to talk to an advisor,” he said. “That human-to-human connection and personalization we don’t see going away anytime soon. … People like to have that trust in an advisor who can answer questions for them and be a sounding board.”

Indeed, Portnoy said Shaping Wealth is seeking to use “technology to amplify human brilliance.”

“The whole point here is to get the best out of people and make them even more human and not be vulnerable to commoditization or dilution through technology,” he said.

About a year ago this month, OpenAI gave developers API access to its wildly popular ChatGPT, a natural language processing chatbot.

Since then, advisors have seen a steady stream of AI applications appear in their existing tech stacks.

Morgan Stanley Wealth Management was among the few organizations to receive early access to OpenAI’s GPT-4 offering in March 2023. Six months later, the firm released the AI @ Morgan Stanley Assistant, which is built on the GPT-4 LLM and allows advisors to ask questions and receive answers incorporating the firm’s internal data.

In April 2023, Morningstar debuted “Mo,” which combines Morningstar’s data and language model on the OpenAI platform with digital avatar technology from New Zealand-based Soul Machines. In September 2023, Morningstar also opened up its API access for “Mo.”