Digital Social Hour
AI's Game-Changing Role in Financial Planning | Lucas Winthrop DSH #1207
Thu, 27 Feb 2025 13:00:00 -0000
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AI is transforming financial planning like never before! 🚀 Join Sean Kelly on the Digital Social Hour as he chats with Lucas from Winthrop Wealth about how cutting-edge AI tools are reshaping the way we approach money management, investment strategies, and long-term planning. 💡 From optimizing your finances to preserving wealth, this episode is packed with valuable insights for high-net-worth individuals and business owners. 💼 Lucas shares the secrets to smart estate planning, tackling market volatility, and navigating the ever-changing financial landscape. 🌟 Discover how AI enhances forecasting, streamlines decision-making, and accelerates financial education. Plus, get the scoop on crypto, gold, and even futuristic topics like mining asteroids! 🪐💰 Don’t miss out on this engaging conversation filled with expert advice, relatable examples, and insider secrets. Watch now and subscribe for more eye-opening stories on the Digital Social Hour with Sean Kelly! 📺 Hit that subscribe button and stay tuned for more exciting topics and exclusive guest insights. 🔥💬 CHAPTERS: 00:00 - Intro 00:27 - Lucas from Winthrop Wealth 02:55 - Tax Cuts and Jobs Act Overview 03:53 - Impact of Tariffs on Economy 06:15 - Long-Term Financial Planning Strategies 08:45 - Age Discrimination in Finance Industry 09:42 - Technology's Impact on Financial Services 13:53 - Mastermind Groups in Finance 15:54 - Role of AI in Financial Planning 18:04 - Cryptocurrency Trends and Insights 23:05 - Investing in Gold & Silver 27:30 - Understanding Inflation Effects 28:00 - Exploring the Longevity Market 29:48 - Connecting with Lucas APPLY TO BE ON THE PODCAST: https://www.digitalsocialhour.com/application BUSINESS INQUIRIES/SPONSORS: [email protected] GUEST: Lucas Winthrop https://winthropwealth.com/team/lucas-winthrop/ https://www.instagram.com/winthropwealth/ LISTEN ON: Apple Podcasts: https://podcasts.apple.com/us/podcast/digital-social-hour/id1676846015 Spotify: https://open.spotify.com/show/5Jn7LXarRlI8Hc0GtTn759 Sean Kelly Instagram: https://www.instagram.com/seanmikekelly/ #financiallandscape #aitools #financialeducation #aiinfinance #aiinbanking
Chapter 1: Who is Lucas from Winthrop Wealth and what does he specialize in?
all right guys we got lucas from winthrop wealth here today we're going to talk about uh making money and keeping money right that's it that's the key because a lot of people can make money but what you specialize in is kind of maintaining that or making even more off it right optimization and preservation yeah yeah because you deal with high net worth individuals right i do but it's all about helping them live life to the fullest and as you add more complexity sometimes that's harder to do right yeah what are the qualifications to work with you
Chapter 2: What are the qualifications to work with Winthrop Wealth?
It really depends. We have a soft minimum of about $2 million. So that means $2 million of investable assets kind of gets you in the door. And that's where it kind of makes sense for us from a cost perspective because our expenses are high. We have subject matter experts that are coming into the relationship. So about $2 million is kind of our soft minimum.
But we have a lot of discretion to work with pretty much anyone who we believe to be a good fit.
yeah and that's the most important thing right like we want to be able to get shit done together we want to have a productive relationship we want to be engaged because at the end of the day if we can't help you and you don't take the advice then what do we do yeah so um yeah but i'd say most of our clients are business owners so typically what we see is that a lot of their net worth is tied up in their business right so high net worth low liquidity
Yeah, that's the thing with net worth, right? Because some people say they're worth like a billion dollars, but it's all in equity on paper and their liquid net worth is actually nowhere near that. Yeah. Don't spend it until it's liquid. Right. Yeah.
Yeah. I kind of battle with it because I think liquid net worth is pretty important. You know, people say these crazy numbers, but they can't buy a house or whatever.
No, you can't buy a house and you really can't do much with anything that's illiquid, right? It sits there. But the interesting part about illiquidity, right? It's still part of your net worth. And so it sits in your estate. So the proper planning is super important to make sure that, okay, if you're worth a billion dollars, right? But let's say your liquidity is less than 10%.
Well, you have this huge amount of net worth that you technically can't access, right? Right. Right. But you can do some planning from a tax perspective and an estate perspective to maybe shift some of that out of your estate, use some of your gifting exemptions.
And a big key for a lot of, I'd say, business owners, especially if you're starting a business, let's say the valuation is potentially low today, but has potential to be high tomorrow, is how do we get some of that growth out of your estate? Absolutely. I don't want to give it to the government. No, you probably don't either. I'd say they're not the best fiduciary of your assets.
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Chapter 3: How does Lucas approach long-term financial planning?
There's about to be a lot of changes, right, with the new administration. So I'm sure you're getting ready for a bunch of stuff.
Yeah, it's always, you know, there's a lot of noise. I don't think it's anything we haven't seen before, but you never really know until the documents are signed and there's laws in place. One of the big ones was the Tax Cuts and Jobs Act, which in 2017, I was part of Trump's administration back in 2017. That was due to sunset at the end of this year, end of 2025. So what does that mean?
That means that essentially tax rates were going to go back up and the state exemptions were supposed to go back down. There's still no perfect 100% clarity on the answer there, but we think that now that Trump's back in office, we'll probably see that extended, which means that hopefully we'll maintain this lower tax rate environment and the exemptions don't get slashed in half.
Because you've seen everything with inflation and continued growth. Those exemptions, they might sound large now, but they could go away tomorrow. Yeah. And so proper planning along the way is super important. Absolutely. Does any of the tariff stuff concern you? Apparently we're in a trade war now with Canada as of yesterday.
I think we're always in a trade war with somebody. Tariffs, not so much. I mean... It's interesting, right? So we look at economic data as backwards looking and market data is forward looking, right? So it's discounting mechanism. I don't really know. And I think that there's so many people who tell you, oh, this is exactly what happens when tariffs come on board.
But we look at the last administration and they didn't like tariffs, but they didn't get rid of a lot of them. Right. People don't realize, though, they just associate tariffs with Trump.
Yeah, but they kept a lot of the tariffs during the last administration. You just didn't care about it. So I think the whole idea here is you focus on what you can control. Like we can't control if Trump's going to go and put more tariffs on China or Russia or whatever, right? But what we can focus on is how we respond to what's happening in the economy, geopolitical events.
How are we responding to that? And the only way you can respond to that is if you are proactively planning, right? So instead of reacting, and this is what we talk about
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Chapter 4: What role does technology play in modern financial planning?
I think it depends. It's so unique to you as an individual, depending on the makeup of your financial life and just what's happening in your life in general. But I'd say we're really focused on three to five years of planning. And the reason why is... you tend to have major shifts and changes in what you want every three to five years. And so let's just take an example of I'm 34.
I'm not married, right? I don't have kids. But if I met someone tomorrow and I dated and got married in three years and started a family in the next five, well, what I want today is going to look very different in three to five years. If that scenario played out. Same thing with right now, if I was to start a business,
If that business is going to be sold in five years, well, my priorities have changed. They've shifted, right? My financial life or my financial makeup looks a little different. And so three to five years is really what we like to focus on on the shorter end of the stick. Now we can project that out as far as our clients want them to, or they want to see it.
But the reality is it becomes more linear, right? So linear projections over a 20, 30 year period, it's just how realistic is that, right? There's so many factors that go into that type of planning to, that can make such a significant shift over a 20, 30 year period. And so if we focus on three and five years, like that's where we can really be productive. I agree. And we can be more dynamic.
We can be more responsive. Yeah, I've heard some high-level people even go as down to one year.
Yeah, I mean, look, six months, one year, it depends on how fast things are moving in your life. Yeah, an AI industry, for example. AI, yeah. So planning, I'd say most of what we're doing, if it's on the business or kind of individual planning side of things, It's probably at the low end one year, but one to three years is really the sweet spot.
And then that five years would be kind of like, okay, we're taking a little bit of a gamble and going out a little further. But the only reason we do that is we're forecasting out and we're looking at, okay, how is that going to impact the tax side of things, whether individually or on your business and then the same thing on the estate.
So you kind of want to get an idea of what it could look like. but one to three years is really where we can get shit done. Makes sense. Yeah. So less than 10% of people in your space are under the age of 35. Do you see that changing in the future? Do you feel like part of that's a trust thing because of age comes more wisdom, people think?
It's interesting. So I will say I'm 34. I think I mentioned that my brother who I work with is 36. So two years older. We've been age discriminated against since we started, right? We started in this industry when I was 22, 23 years old. That's young. Yeah.
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Chapter 5: How do mastermind groups enhance financial strategies?
But at the end of the day, it's about how are you able to help the end client, right? And with technology, we've been able to bridge some of that experience gap a lot quicker, right? So if you've been doing this industry for 30, 40 years, well, the technology in our industry has only really been really good for the last decade. So perfect timing for me when I came in, right? Technology.
What are you referencing with that? I think just in general, so it would be everything from financial planning technology, the investment management kind of screening.
A good example would be you used to have to talk to somebody who worked for a mutual fund company to be able to get all the data, all the statistics, all the different analytical information that you wanted to know if that was a fund that you want to invest in. Now...
at that about 10 years ago maybe even 15 years ago it was really primarily a relationship business right oh i have my wholesaler they come to the office they'd meet with me they'd tell me why their fund is so amazing they introduced me to their portfolio managers and then now that's just become so accessible online right like the tools have gotten so good and providing all the information so you don't necessarily need to meet with those people anymore to get the information that you did back then
And so I think just the speed and accessibility to information and shifts and changes in what we're doing, whether it's from tax planning or investment management, the information is at your fingertips. And then also being able to use these tools to educate yourself. I don't have to go take a course at a college to learn about a certain financial planning topic.
I can go on YouTube and learn about it. I can go and access these materials online. And so I think just the speed to get educated
is so much quicker and it's kind of i mean that's every industry right yeah but specifically for our industry what it's done is uh i think it's made it easier for people to come in and if you have the right mentality if you can connect with people and you're good with on the relationship side you can kind of piece together those those different uh things but at the end of the day what i say is it's 100 about the team that you surround yourself with
And so personally, I don't consider myself, I'd say I'm not an expert in anything, but I have the expert on my team. Yeah. Right. I'm really good at managing relationship. I can understand what you want and I can go get you the answer and I'll bring that tactical person into the relationship to execute. Hmm.
And so I think that that shift has also started to happen in our industry where typically it used to be the, again, we talk about big egos. It was, I'm the guy, right? I'm your guy or I'm your gal. I'm the person who is, you know, your investment person, your financial planner. I own the business and I do all these other things. And that's just not, it doesn't work. It's not realistic anymore.
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Chapter 6: How is AI transforming the financial planning industry?
And then for me, what makes it super fun is if I'm talking to you and you're my client and you're struggling with something or you're trying to figure something out, the tax side of things for the type of business that you're working in, I might have another client who has some very similar situation and we have something that we've done for them that might be interesting to you.
And so either maybe connecting you guys so you can talk about it or even trying to say, okay, well, I've seen this movie before. Here's something that might work that worked for somebody else. 12. Because you said you're 34, started at 22. Yeah. About 12 years. Quick math. I love it, man. Are a lot of your clients getting into AI or like any future tech stuff?
Yeah, I think, I mean, AI is everywhere. I think it's been around a lot longer than people actually think it has. Well, I know it has, right? It's just, when are we able to interact with it in a way that is meaningful? I think that's probably been over the last few years and why you've seen AI is, you know,
I haven't gone to a conference or turned on a TV and haven't seen something to do with AI in the last two or three years. And so, yeah, I think AI in general, we get a lot of questions about it and how it's applied to what we do. For us, I think it's just making us more accurate in the way that we're able to forecast the machine learning of how are we putting goals into a systematic format
And tying that into potentially like cash flow and investment advice. It's just helped us get to that next level of... Something that might have taken them months to do can now be done very quickly. Right. And so the speed to get answers or do the work has definitely increased. Yeah.
I think that's everywhere, right? It is. It's going to be interesting to see how it enters your space if people start using AI for like investment advice, stock advice, crypto advice, stuff like that. I think they already are. I'm hearing about it. Yeah, I haven't seen any mainstream ones, but...
Yeah. And the problem is like, we're in such a regulated industry. And so AI in a regulated industry needs to be really regulated. Right. And right now, like, you know, the, all these large language models, you know, they're looking at certain applications for industry, but most more so at the institutional level.
Hmm.
where they can keep it in-house. But I bet there's someone out there who's going to be a disruptor and comes up with some model that works extremely well for financial planning, especially for mass affluent, which is like, I don't need to talk to a person right now. I just want some general advice and here's all my information. Can you ingest it and give me an answer or some recommendations? Yeah.
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