Needs Work

If you’ve sold a house, you’ve met the buyer’s inspector. You spent the weekend painting trim and clearing counters. He spent his visit in the crawl space with a flashlight, and the new offer came in lower by roughly the price of a furnace.

RIA buyers may be about to send an inspector for AI, and firms still running on manual work could see the cost of modernizing come off the price. The inspector will want to see that your people use it, and that your data is clean and your work is written down.

Also inside: Build This: a skill that drafts every RFP and DDQ, so your team starts at the edit. Asked This Week: why a scheduled task seems to get lazier. And in What Moved, the big banks limit what AI agents can do in client accounts, and the SEC’s adviser chief says not to wait for AI guidance.

This is issue 5 of AI Under Management. It runs every other week for people at wealth and asset management firms who want real work out of this without creating a problem for themselves. If you know someone who’d want it, send it their way.

BUILD THIS

The RFP first draft

Answering an RFP or due diligence questionnaire means finding the right old answer, pulling current numbers, writing what’s new and checking every line for accuracy and compliance wording. Build a skill that does the first pass of all of it on every one that comes in. The skill should tell Claude:

Where to look. A folder of past RFPs and DDQs, through the Microsoft 365 or Google Drive connector. Use a cleaned copy with client names and reference sections removed. When two old answers disagree, use the newer one and say which it came from.

Where the numbers come from. Your composite performance data, as of the date the RFP asks for. Never carry a figure over from an old response.

How it should look. The prospect’s template if they sent one, your house formatting if not, and every word or page limit.

What compliance would flag. Performance without the context it needs, superlatives, anything that reads like a promise. Flag it, don’t rewrite it.

What it can’t answer. If nothing in the folder covers a question, say so and list what a person needs to supply. Never fill a gap from general knowledge.

Whether it answered. Reread each question exactly as asked and say whether the draft answers it.

A person owns every response: they check the draft, fix what’s changed and add what’s new. Have them save the final version to the folder, and the next draft starts from it.

How it’s going. A firm I work with built a version of this and used it on an institutional RFP. The team estimates the first draft got them 70 to 75% of the way there and saved three to four days. The rest should stay human: judgment calls, process changes the old answers didn’t know about, and questions they’d never been asked. A portfolio manager had it check each answer against its question; it often said no, and it was right.

THE MEMO

Needs Work

Real estate agents have a polite phrase for the house that will cost the buyer money after closing: needs work. Allen Darby thinks RIAs are about to get their own version.

Darby runs Alaris Acquisitions, which advises RIAs on selling. He told InvestmentNews in October that an advisor typically supports 80 to 120 clients today, and thinks that could reach around 200 once AI is fully built into the firm. In his telling, buyers are the ones investing in AI, while most sellers have little more than a Claude or ChatGPT login.

Walk that buyer through your firm. Say their advisors carry 200 clients and yours carry 100. To them it looks like a renovation project: two to three years of thinner margins to bring you up to their standard, and Darby thinks that cost comes out of the offer.

The inspection isn’t happening yet. Darby expects it over the next couple of years, as extra diligence or tougher terms for firms that run on manual work. He argued the opposite last year, and says he could make the case either way. Craig Toberman, a CFP, told The Daily Upside that valuations come down to advisors and the client relationships AI can’t replace. He may be right, but the buyer still sends an inspector first.

The inspection

Jim Dickson, CEO of Elevation Point, described it on The Advisor Upside Show. The first stop is the data: is it codified, and can it be pulled out? Without that, he said, AI is very hard to make work. Then the wiring: a seller’s technology that won’t merge with the buyer’s is a reason to look elsewhere.

At RIA Edge in October, Celent’s Ashley Longabaugh put AI use at 63% of RIAs and said only about 1 in 10 firms has it fully integrated into its business strategy. Most firms already have the appliances; the inspector wants to know whether anything about how the house runs has changed.

Leave the manual on the counter

Good sellers leave a folder on the kitchen counter: the furnace manual, the paint colors, which breaker runs the garage. Darby’s version for RIAs: document how work gets done and who does it, so a buyer can see the firm runs without the founder in every decision.

Building skills writes that folder as a side effect. A Claude skill is a packaged set of instructions, plus any files it needs, for one repeatable task at your firm: the data, the steps, the output, the reviewer. A library of them, owned by roles rather than people, is the operations manual a buyer wants to read, and it does the work too.

The opposite is the house where only one person knows the trick to the back door. I’ve watched it happen with AI: one person becomes the AI person, the one who knows which prompts work and how the reports get made. That’s a new key-person risk. When that person leaves, the efficiency goes with them.

Darby also says to put freed-up time into growth and make it visible. Track a few workflows before and after. Hours saved is the easy number. What the hours turned into, more households per advisor or faster turnaround for clients, is the one a buyer will notice.

In Astraeus and Pirker Partners’ study of RIA filings, firms disclosing AI grew headcount 15% in the year to April, against 8% for firms that didn’t. The firms using AI were the ones adding rooms.

ASKED THIS WEEK

My scheduled task used to open every attachment. Now it skips folders. Is it getting lazier?

No. Each scheduled run is its own session working from your instructions and whatever’s in front of it that day. When the output drifts, check two things first: whether the pile got bigger, and whether the instructions left room to choose. “Check my inbox” lets Claude decide what’s worth opening, and on a heavy day it may open less.

Take the choices away. Name every folder. Say “open every attachment.” Bound the window (“received in the last 24 hours”). Put names, tickers and anything it keeps getting wrong in a reference file it reads every run. End each run with a count: items found, items processed, items skipped and why.

If it still drifts after that, the job is probably too big for one run. Split it in two.

Got a question you’d like answered here? Reply to this email.

WHAT MOVED

The big banks are limiting what AI agents can do in client accounts

JPMorgan CFO Jeremy Barnum said on the bank’s third-quarter call that Chase blocks services that log in with a customer’s shared password where it can. A customer who hands credentials to an AI agent, he said, may carry the consequences if it misbehaves. Citi said in a statement, reported by The Paypers, that outside agents can’t log into its digital banking or make transactions there. Bank of America told CNBC it’s limiting agent access and wants a human approving money that leaves an account.

What it means for you: Ask your custodian what its policy is on agents logging in with client credentials, and who carries the loss if one moves money a client didn’t intend.

The SEC’s adviser chief says don’t wait for AI guidance

Brian Daly, director of the SEC’s Division of Investment Management, told a Stanford roundtable on October 16 that advisers are more hesitant about AI than he thinks is warranted, that the fiduciary duty firms already carry can handle it, and that guidance may come too late or too narrow to be worth waiting for. He asked firms to tell the Division which specific rules or staff positions get in the way. His views aren’t necessarily the Commission’s.

What it means for you: If something useful is stuck behind “compliance won’t allow it,” find out which rule, specifically. If there is one, the Division has asked to hear about it.

Next issue in two weeks. Forward this to whoever at your firm gets handed the AI question, and reply if you want to talk about any of it.

Tim Diemer
Partner and COO, Bridge AI Consulting

This is general information about published rules and products, not legal or compliance advice. Run your own facts past your own counsel and CCO.

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