Mezzi CEO reveals if customers take wealth management advice from AI

Mezzi Co-Founder and CEO Manish Jain joins Asking For A Trend host Josh Lipton to discuss the company's study on whether its customers were taking wealth management advice from its personalized AI, with results showing that 36% of buy advice led to a purchase within 10 trading days.

Manish, it's great to see you again. Uh let's dig into this. Uh it sounds like you had this NYU Stern researcher Manish looked at what people asked Mezi's AI, your AI, what investment advice they got, and then critically, uh whether they what they actually then did with their money. What would you think uh Manish, is the big question or questions this researcher was trying to get at, trying to answer with your data?

Yeah, thanks again. Thanks so much for having me on, Josh. Appreciate it.

So, you know, effectively what the NYU researcher was trying to see was are people actually following the recommendations that come out of AI. Uh, AI is finance is one of the most hotly discussed topics when it comes to any AI search engine. Uh, and so what the study did was looked across all of Mezi's customer data. These are generally high net worth customers or affluent customers with pretty complicated finances. And one of the things you've seen out there is that there's a lot of survey data published by traditional advisors and incumbents that it really says that people don't trust AI for financial advice. Well, in fact, this study actually shows the opposite. It shows that people are trusting AI and specifically Mezi's AI for financial advice and that that trust grows over time. Roughly one out of two of our members were following recommendations coming out of our AI, and those recommendations led to a roughly 15% improvement in risk adjusted returns.

What's the age of folks on your platform, Manish, generally? Like you know, what's the average age? I'm just curious because I I wonder if there's any sort of you're kind of generational tells here.

Yeah, I'll start by saying that when we build this product, we don't think about the age of our customers, we think about that the problem that they face, and it's it's complexity, it's managing a lot of wealth, whether you have an existing financial advisor, kind of our hybrid and self-managing a little and work with a traditional advisor for a portion or have been self-managing for two decades. It all turns out that that translates into people that are roughly between 40 and 70, probably have families, um and have a net worth of over a million dollars.

It looked to me, Manish, and correct me if I I have this wrong, but as you read the paper, it looked like the AI was steering people away from individual stocks and and towards sort of lower cost index investing. One, do I have that right? And two, what why do you think that is?

Yeah, you absolutely have it correct. Uh and when you think about where these customers are coming from, whether it's someone who's been self-managing for 20 years and maybe bought Apple or Google 15 years ago, combined with the S&P 500 index fund, or you had an advisor that put a customer into a complicated strategy that bought hundreds of individual stocks, they ended up with a a misalignment in risk across all of their different accounts and all of their different assets. And so Mezi's recommendations to diversify, reduce that risk, which were oriented towards low-cost index funds actually drove that behavior.

What can Mezi AI Manish spot for investors that maybe a Claud or a Chat GBT can't?

Yeah, I mean, it's important to understand that Mezi is a fiduciary financial advisor. We are legally bound to provide advice that's in your best interest. And so in order to do that, we have to really understand who you are versus who the next person is. That might be, when do you want to retire? What does your family situation look like? Do you want to pay for your kids college education? What are your ultimate goals? And then understanding that on a customer by customer basis requires really having the infrastructure and the capability to take all of that in, wanting to actually take all of that in and then using it in the right way to construct appropriate financial advice. Uh, and so that's that's how we are built purpose built for providing financial advice, whereas, you know, a Claude, Chat GPT, Grock, etc can answer general financial questions but can't actually provide you with personalized fiduciary financial advice.

What happens Manish, if and when the AI would give bad financial and investment advice? Like who is ultimately going to be kind of accountable and responsible for that?

Yeah, I mean I can tell you that one of the reasons we're building Mezi is because I myself have had so many experiences with advisors where I have ended up with bad advice. Uh and so when we're building Mezi, we again have to keep this fiduciary obligation in mind to everything that we're doing to really build effective great advice. Uh and so that's how we've built our infrastructure and ultimately that's what we believe that this study shows in terms of the effectiveness of the advice.

When and where, Manish, does a human financial advisor in your opinion still potentially have an advantage? Do they?

Yeah, I mean, I think the the bad human financial advisors are on the way out. Uh I think the 1% of assets business model that financial advisors on average charge uh is generally in danger. Uh that being said, I think money is psychological and some people do prefer to interact with a human traditional financial advisor. We with Mezi are creating a brand new category that allows billions of people hopefully around the world to ultimately have a financial advisor in their pocket. And so I think you'll have both paradigms that exist. We're really excited for the paradigm we're building.

Manish, as always, great to have you on the show. Thank you, sir.