Meet the start-up CEO who thinks AI will replace every financial adviser
Fahad Hassan wants to make financial advisers completely obsolete. His wealth management start-up is betting big on the disruptive power of AI.
More than 300,000 people are currently employed in the US as personal financial advisers. By 2035, Fahad Hassan believes that number will be closer to zero. “I don’t think wealth advisers will have a job in five to 10 years unless they’re serving boomers,” he says.
Hassan is the co-founder and chief executive of Range, a wealth management start-up that is betting big on the disruptive power of artificial intelligence.
Many companies in the industry are trying to use AI to boost adviser productivity by automating back-office functions.
Hassan, who has spent his whole career working in tech, wants Range to go much further. The company’s goal, he explains, is to make financial advisers completely obsolete.
“A lot of folks that are building in the wealth tech space … are using AI only up to a limit, and they’re letting humans complete the equation,” he says.
“My question to these advisers is: What is a human doing? If your AI is truly amazing, what’s left for them to do?”
Hassan makes bold statements, but his company’s current offerings are currently more modest. Range doesn’t yet offer a client-facing AI adviser, though Hassan says his firm will launch one within the year.
For now, every client seeking advice receives it from one of Range’s 18 human advisers, who use AI tools built on existing large language models to speed up their workflow. “We’re still early days,” Hassan says.
Range’s ambitious vision has attracted many customers. The start-up, which started directly managing client assets 18 months ago, currently oversees roughly $US270m ($420m) of assets for nearly 400 clients, according to regulatory filings.
Nearly 2000 clients, with $US6.5bn in assets, use Range’s platform in some capacity – receiving advice on topics like diversification, retirement planning, and tax savings, all from humans.
An adviser’s view
Sam Swenson, one of Range’s financial advisers, says the start-up’s current AI tools help him collect and analyse data from clients, build retirement plans, and project taxes.
Swenson previously worked at Goldman Sachs, Credit Suisse, Wells Fargo, and his own RIA (registered investment adviser) – but he says he can work much faster at Range compared with his previous jobs. “I’d say I’m at least twice as productive in terms of how quickly I can move through data,” he says.
Swenson isn’t worried about his employer’s plan to replace him with a robot. “My goal is to help the software move along as quickly as I can,” he says.
If Range succeeds in automating financial advice, Swenson believes the start-up’s 18 current advisers will become product managers and subject matter experts. “Either we’re going to be part of the AI revolution, or we’re not,” he says.
The company has drawn capital from some high-profile investors. Since its establishment in 2021, the start-up has raised more than $US40m across two funding rounds, attracting backing from venture-capital firms, prominent Silicon Valley founders, and Google’s Gradient Ventures, a fund that specialises in AI-centric firms.
Those investors are betting that the world’s wealthy will eventually be willing to place their millions in the hands of AI models, in the same way many investors have moved from human brokers to self-directed trading.
“If you wanted to trade stocks in 1995 you had to call a broker – a licensed, credentialed professional who you trusted to move money for you,” Hassan says. “You don’t have stockbrokers anymore.”
Defenders of traditional wealth management practices argue that human relationships are an essential part of providing good advice.
Human advisers help their clients stick to their investment strategies during times of turmoil; they reduce client stress; they help customers navigate significant, often distressing life events, such as divorces. None of those roles can easily be automated away.
Less face-to-face
Hassan argues that wealth advising is undergoing a generational shift. Older, wealthier individuals still rely on human advisers. But members of Generation X and millennials are more comfortable with digital advice – and they’re less interested in face-to-face meetings, he believes.
Young people are already learning to place their trust in AI, Hassan notes. Each time they ask ChatGPT for medical advice or get into a self-driving car, they are literally putting their lives in the hands of a machine.
Compared with risking life and limb, investing money doesn’t seem like too much of a stretch, Hassan says. “The market is getting more and more comfortable with AI by the day,” he asserts.
If Hassan is right, younger customers, wary of the high fees charged by traditional advisers, should soon be willing to forgo human counsel and place their trust in the machine.
The winners in the new, AI-powered world will be the players who can get their prices as close to the floor as possible through automation.
“That’s what we want to do,” he says. “Full automation, lowest price in the market for as many people as possible.”
Pricing model
Unlike traditional wealth advisers, Range doesn’t charge a fee based on a percentage of client assets. Instead, it offers three fixed-fee pricing tiers.
Its cheapest option, priced at $US2655 a year, offers access to one of Range’s human advisers, along with budget and debt management, retirement planning, and estate planning. Pricier tiers unlock tax filing and alternative investment plans.
The odds that Range’s fees will go down over time? “One million per cent,” Hassan says.
Wealth management fees have been under pressure for years.
“Clients – particularly high-net-worth individuals – increasingly expect their advisers to provide more services beyond investment management,” Kevin Lyons, a senior analyst at Cerulli, told Barron’s Advisor in April. The cost of those extra services has compressed wealth managers’ profit margins.
Yet, despite improvements in digital technology, the industry has remained stubbornly dependent on human advisers and percentage-based fees.
Robo-advisers, once expected to have a disruptive impact akin to e-commerce companies, have failed to revolutionise the advice business.
Goldman Sachs and JPMorgan both unplugged their robos last year, while robo-centric pioneers like Betterment now offer hybrid models that give clients access to human advisers.
Hassan insists that this time is different. Range’s AI models will be more customisable than robos, he says, and they’ll be able to provide services like education planning, retirement advice, and insurance optimisation.
Regulations on the topic of AI financial advice so far are limited.
“There’s not, for obvious reasons, a lot of clarity out of the regulators on how to deal with AI, just because the regulations were written way before this,” says Mark Gilbert, CEO of Zocks, a start-up that provides AI assistance to human wealth advisers.
Hassan says Range’s services might not be right for everyone.
“We are a technology company, we’re using AI, we’re using the latest models,” he says. “Our customers know this well before they sign up, and if they’re uncomfortable with it, they don’t have to use us.”
Meanwhile, Range isn’t just using AI for financial advice. Case in point: Many of Range’s video advertisements, which are distributed on shortform video platforms like Instagram Reels, feature AI-generated deepfake actors.
“If you see a Range ad on the internet, which we run a lot of, it’s no longer a person – it’s an AI,” Hassan says. “Those actors are no longer acting for us.” The ads seem to be working. Hassan says Range’s revenue is growing 300 per cent year over year.
People haven’t noticed that the actors in the advertisements aren’t humans. Perhaps the same will be true for Range’s advisers.
Barron’s
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