Interview with Davyde Wachell, founder and CEO of Responsive AI

Davyde Wachell, founder and CEO of Responsive AI, a financial platform powered by artificial intelligence, believes the future of wealth management is in providing truly customized and powerful advice.

Why provide advice and keep a strong focus?

Quality advice should be widely accessible. To excel in traditional methods of serving clients in this space, companies should have true know-how. These methods, however, are commonly limited to selling portfolio products.

“I think it’s possible to bring great advice that’s given on a mass scale—advice that’s personalized, intelligent, tactical, and strategic, not just selling portfolio products,” Wachell says.

The statement above means that a great deal of work lies ahead for wealthtech companies. However, limited resources force companies to ask themselves how they can save effort and what they can do without. Companies need to work out priorities so they do not waste resources on secondary activities.

“It’s questions like, 'What do we get rid of?' 'What do we ignore?' 'What do we focus on?'" Wachell explains. “How can we get rid of the jargon, the layers of abstraction, the different roles, and just provide a unified advice model that is affordable and makes sense for end clients? This is crucial because automation and machine learning are going to make redundant and irrelevant a lot of functions in investment management.”

Wachell says much discussion currently revolves around the importance of a client’s experience, but people’s opinions differ about what enhancing this experience entails. In his opinion, it’s nothing more complicated than dumping old methods and unnecessary functions and empowering clients with new tech.

“They’re talking about client-focused experience, but what that really means is you have to let go of the old ways and the things that don’t matter and use technologies that would help you in improving the experience," Wachell says.

He thinks it’s important to prune the tree of investment management and wealth management to really focus on delivering advice, and he believes different value providers will be involved in that process. Wachell is sure that alpha, planning and accounting providers will be involved, and he believes that some life coaching and career planning advisors might be involved because, after all, how you spend your money is how you spend your time.

What does human-centric AI mean?

According to Wachell, the really important factor is to use machine learning and AI technology in a human context. A truly rich potential lies between clients and their advisors in a hybrid human context, and so much assistance can be given to that advisor–client relationship.

“We’re focused on how we can add value to that advisor–client relationship and design our software for multiple users so that using the software contributes to learning the system,” Wachell says.

Modeling human behavior is at the core of what Responsive AI does. Logan Grosenick, its chief science officer, spent 12 years applying machine learning to animal and human behaviors and studying how brain activity leads to different personality types. Responsive AI uses scientific methods to understand the cyclical nature and seasonality of human life. It also studies what types of cyclical behaviors predict certain outcomes, how to detect when a person’s life really changes, and other human-centric factors.

Among the problems of providing both human-centric AI and quality focused advice, Wachell lists the mismatched experience in wealth management that people face, especially in European and Canadian markets, as one of the most difficult. For example, while one person tries to issue a loan to a client, another person else tries to sell that same client a portfolio product.

“I think people want a unified advice framework around their financial services," Wachell notes. “Those who focus on that right are probably going to involve people—not robo-advisors—involve a hybrid model, and make a lot of money.”

Takeaways
One fact is indisputable: It’s time to give AI a chance to prove itself valuable. Market changes come rapidly, forcing companies to innovate strategies for years to come. AI and human-centered services are parts of Wachell and his company’s plan. What about yours?

About
Davyde Wachell has spent the past 12 years in fintech. He’s a wealth manager and second-generation quant finance specialist. After he studied AI in the Symbolic Systems Program at Stanford University, he designed investment management research and compliance platforms until he created Responsive AI four years ago to address wealth management for the future and optimize how advisors serve their clients.

Vasyl Soloshchuk is CEO and co-owner at INSART, a fintech and Java engineering company. Vasyl is also the author of WealthTech Club, which conducts research into Fortune 500 companies and start-up robo-advisor and wealth management companies.