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Ep. 95 - AI vs. Human Touch: The Future of Financial Planning in the Age of Machine Learning w/ John Henry

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Alright, let's cut through the bullshit about financial planners being trust fund babies or money-obsessed sharks. In this episode, we're diving deep with John Henry, a math whiz turned financial advisor who's flipping the script on what it means to help people with their money.

John's journey from professor to insurance actuary to investment advisor is anything but typical. He started out thinking he'd only work with data scientists on investments, but life had other plans. Now, he's helping all sorts of folks navigate their financial journeys, from getting out of debt to avoiding crypto scams pushed by sketchy online dates.

Here's the real talk: John's not in this game for the fat stacks. He's got a day job and does this evenings and weekends because he genuinely gives a damn about helping people. And let me tell you, the stories he shares about saving people from financial disasters will give you chills.

We dive into some heavy topics like:

  • The role of AI and machine learning in finance (spoiler: it's already here)
  • Why you shouldn't try to beat the market like you're the next Wolf of Wall Street
  • The struggles of building a financial advisory business that actually helps the people who need it most

John drops some serious knowledge about portfolio optimization, the pitfalls of outdated financial theories, and why your TikTok financial guru might be leading you astray.

If you're tired of the same old financial advice and want to hear from someone who's using their big brain for good, this episode is for you. Whether you're just starting out or you're looking to level up your financial game, John's got insights that'll make you think.

Ready to get your financial shit together? Check out John and Story Makers: LinkedIn: https://www.linkedin.com/in/johnhenryphd/ Company Page: https://www.linkedin.com/company/story-makers-investment-advisors/ Website: https://www.storymakersinvestmentadvisors.com/

Remember, wealth building is a journey, not a sprint. Take that first step today, and who knows? You might just be thanking your future self for listening to this episode.

Follow our Host, Stoy Hall:
Twitter, FaceBook, Instagram, Tiktok, Linkedin

Stoy Hall, Host:

We're back for another episode with another financial planner, right? There's a lot of us and we get a bad rap every now and again. We just said this off camera, but we talk about how in our industry, there's a lot of people who think that the financial planners come from money. And second generation, third generation, just money. And it's all money driven. You guys know my path, but today we're going to learn about John Henry's path and who he Helps in story and at his company of story makers. So John, without further ado, why don't you talk to us about where you came from and why the hell you decided to jump into this industry?

John Henry:

Yeah. Yeah. Thanks, Stoy. And thanks for having me. So I fell into this I didn't start off as an investment advisor or a financial planner started off more Mathematics and statistics initially as a professor and then got pulled into the insurance world. As a model builder, actuary, data scientist, and it was, I was at convert AI leading data science there, and my team knew that I was very interested in the markets and economics, investments, and So informally was talking with them and thought, there's an opportunity. There's a lot of while they had very good quantitative backgrounds and, forecasting, working with data really. Didn't put any time or effort into their own investments or portfolios. And so I thought there's a niche opportunity here of folks like that were on my team. So it looked into what was necessary to be able to legally provide investment advice. And that, that was really how I started I guess things have changed a bit from that beginning because of demand initially I thought I would only work with, data scientists and quant type people. Individuals, but and only for investments. What I quickly learned was there were other types of individuals that, that wanted to work with me and on a variety of types of problems. And so today I work with people that aren't just data scientists and on a variety of types of financial planning and investment advising. Topics.

Stoy Hall, Host:

Isn't it crazy how we go into this industry thinking, Hey, yeah, this is what we're going to do. This is it. And then all of a sudden the needs and demands come from people. And I think that's a huge portion of what we do and understanding where our society's at, right? Investments are important, but people want that person to help them with the other stuff. Yeah. And what better way to have that person be the one who's also knee deep in all of their investments in their money. to help them through those situations because they are so integrated. When you transitioned, I don't say transition, but when you added those other services, right? Because going from the investment side of things into this planning, into the other advice stuff, into being able to do courses and whatnot, what was the biggest transition for you as the advisor to make that mentally?

John Henry:

So I guess there was some, there still is some challenges on, my own. Background and knowledge and expertise I guess as a math professor for many years and building machine learning models, uh, I feel very confident in that area. And so that you might call it imposter syndrome or or another term, but really feeling like I need to learn a lot more. I need to Yeah, not have questions questioning myself or delays and being able to respond. And so that has motivated me to continue learning. And and it really feels good. I still like the kind of portfolio optimization and especially the math behind it, but helping people Put together a road map for getting out of debt. Something like that. And not just working with people with lots of money, but people who are, 5 minutes out of school or or are in debt. And, being my own business, I also have to enjoy the flexibility of being able to, if it's somebody I help for free or lower the price or do what I need to do to be able to be able to work with them also feels good. And I still have a full time day job, but most. Of my financial planning is evenings and weekends. So it, it takes some pressure off. I don't have anyone to report to or, uh, certain metrics to meet. So it's really for fun. Of course it's nice to make a few extra dollars and but more than that, just getting to help people. I've got a lot of teachers, professors, doctors, and nurses, and people in my family helping people. My wife is public defender, helping a lot of poor and folks with their own challenges. And so we get together and everybody's sharing their stories about helping people. And and now I get to do that as well in a way that I haven't before. And it's just really maybe for my own maybe it's selfish but. It's really satisfying. I helped someone recently who was looking at this investment. He called it some, someone he had met on an online dating service, this web three crypto thing that I said, I'll just tell you for free. Like this is a scam. Do not put your money in this. He was a teacher and it was like, Close to putting his life savings into this was really into the girl and was able to go through, do a formal due diligence, tell him all the ways in which, this was not legit and got to feel like I, I really helped somebody avoid catastrophic mistake.

Stoy Hall, Host:

That gave me the chills that, that story gave me the chills because that's what we're here for, right? We're not here to make a shit ton of money and, be Wolf of Wall Street. That's not truly what I believe our industry and the financial planning side is for. It's for those stories, right? Because there is no, you can't track the, and you can't really, you could do the math, but you can't really track the fact that the ROI on what you just did. Yes, it's, it saved him from, tens of thousand dollars, whatever, how much money it was, but the emotional toll, the next steps to that, what happens after that? Those are all things that we can protect and help people with that doesn't have a true value to it, right? It is literally valueless because it who knows what it would turn into kind of that butterfly effect type situation. Yeah,

John Henry:

just one more detail on that. It was tough in the sense that he didn't like what I had to say. I had to deliver it in a way that was compassionate, but he looked at this as a real, uh, not just financial opportunity, something with a potential partner. So, so it was tough and it is at times telling people what they don't want to hear and being a tough love, maybe idea, but and, yeah we're not currently working together on anything after that. So there was no kind of longer term engagement. Maybe there will be down the road, but anyway I hope he's doing well. Maybe later.

Stoy Hall, Host:

Absolutely. You had brought up machine learning. You had mentioned AI earlier. I'm going to ask two questions or go two different paths. One, where do you believe that comes into play in our industry? One, is it already into, where do you see it going for our industry?

John Henry:

Yeah. So I see more and more. Entities popping up to provide services embedding AI and processes. And that's great. I see it in other fields as well. Feel as there's a real human component. I, I maybe err on the side of caution of not wanting to automate things or respond or post things that The sound canned and not like my real voice. I guess I find it valuable in this context for getting some preliminary information about Maybe a new concept or topic just to get a quick summary, some bullet points about, I don't know, something tax related or some retirement planning topic. That's not necessarily in my wheelhouse. And then I can go from there and have a set of. Things to look up and dig into. So I think also summarizing meetings, I guess there's some value there. And that's true for not just financial planners or advisors. So yeah, that's a few. I feel like it's going to continue to progress. I teach this stuff and build it myself. And it's just, Awesome. I love how things are improving and yeah, different entities and businesses are popping up and building things differently, using different data sets, customizing things. So it's really exciting. Also, the performance is getting better. If you've ever tried these, uh, teaching math and some real estate topics. Where there's calculations involved. It was almost laughable when these first came out, how wrong they were and how confident they sound. So if you don't know how to do the math, you might. Mistakenly just take the output as truth and I feel like they're really getting better in that respect which is fun. Yeah trying to blink.

Stoy Hall, Host:

No, you're good. I truly believe specifically our industry and actually around the world in terms of what machine learning AI stuff can do for us is. Increase efficiencies in our operations, right? And provide a more custom feedback mechanism, right? Note taking, et cetera. Summarization. That's why I believe it will do the most specifically for our industry, but around the globe, I think for all industries is. Is that piece because that piece takes the most time and effort and notations and all of those things that when we go back to do it that's where our time is spent now. It cannot do and it will never be able to do what you just told about that story of. Saying basically we'll vet this out and say no because of that, because it won't be able to. That's emotional driven things. It is not a factual data point that I believe I don't think they can learn now eventually. Sure. But the human element to everything that we do We'll always be there. It's just going to make us more efficient. So we're not wasting time, whether it is doing more research and getting into the weeds, is it note taking? Is it those things it's going to allow us to shorten those times so we can spend more time in front of people, focusing on their emotions and learning about them truthfully, as opposed to the other side, where do you see it fitting into? I know there's machine learning investment stuff right now. I know there's hedge funds that are doing. AI generation and picking stocks and things like that. Where do you see that leading to both for that retail person? But also institutionally within the markets, do you think it starts to make different cycles and screw with what we're used to?

John Henry:

I feel like machine learning has been impacting markets already for a long time. Uh, we see things happening. I follow different indices and ticker symbols and things closely and while things happen and wonder, what is going on here? What is the reason for that? You think something should have gone up and some economic data comes out and it goes the other way. So I feel like a lot of that is already algorithmic driven. I guess where I see an opportunity for. Retail investors, it's something I'm working on myself is I've got a pipeline of data sources, tens of thousands of variables coming in feature engineering, machine learning models being built and things being updated not in real time, but every week. And so I, right now I have all that output for myself for, what is happening in the world. I'm being purposely vague. And what kind of asset allocation might be optimal for a certain performance metric. I do I do think it's worth mentioning that, In my opinion, there's a kind of oversimplification of methodologies that are used for asset allocation, portfolio optimization, this what's called modern portfolio theory is 50 years old and everyone learns to maximize this sharp ratio, which is not even in the top 10. performance metric, in my opinion. So I think there's room to improve there, even for quant people. Also it's, these are largely not data driven in the sense they don't take as inputs a lot of macroeconomic or geodemographic information. It's just based on historical data. Performance, I'm getting technical here, but where was I going with this? Oh, so the output that I see that large as it might be, and a mix of structured and unstructured data that could be that you could throw a large language model at that and have some, specific output, maybe starting with something off the shelf that has some additional. Understanding like a chat GPT or one of these others and then add in a layer of custom learning on your own insights and analytics. And then a user could see that and interact with it, talk to it and use that. Of course, there's still questions around regulation and, and also just potential things that could go wrong. I haven't, made something like that available because I want to see. I don't want them getting recommendations for, from a robot that I build that I could get in trouble if it's something I don't agree with but I think it's an interesting opportunity and I already see some of the big entities making some things available. And I imagine that's, in part how they're building those technologies.

Stoy Hall, Host:

Yeah, I agree. I also think there's a part of that though, from the retail perspective of You got to understand that institutions are also trying to make money and they know from a data perspective of what retail usually does from an emotional standpoint, let's take a GameStop situation. For example, that's not a bunch of retail people making a bunch of money. What that is, it's institutions making money off of you. And you're going to end up holding the bag because you're trying to YOLO it or, FOMO it and try to get whatever you can out of it. As a retail person, you're not looking for 10 X, a hundred X, a thousand X, right? You should be looking for one X, 10%, 20 percent because that's where your realm is. You don't have the time. You don't have the resources. To be competing with the institutions. And if you try to, you're most likely going to lose. But in this scenario where we're getting these computer learning and AIs, I think it will help close that gap a little bit for a little bit. Because again, you don't have the billions of dollars pump behind you to ensure that institutions do that. And so I just want everyone to know that stop trying to beat all these people. Stop trying to see, hey, someone did this trade. And they made it, a hundred X on it. That's not you. That's not realistic. That's more lottery stuff. Stick to just the everyday stuff and focus on your own goals in your own timeframe, not because someone, got lucky. That's important to know.

John Henry:

Yeah. And I think social media has a lot of, I'm not on anything except for LinkedIn, but. But from what I hear, I feel like there's a lot of people giving advice, making recommendations with lots of followers. And that's concerning to me that folks are looking to these kinds of resources or people who, from what I hear often have, some they're really pitching, I don't know, NFT or some, something that maybe they've got a, Partnership with some with somebody. Yeah, that's concerning, but, I, even this morning, I for fun looked to, chat GPT to see how it would respond with some kind of investment recommendations for, uh, balanced portfolio for a new investor. And it was pretty reasonable output. There were a couple of things that I wouldn't have recommended myself, but already I feel like that's maybe safer than just turning to the internet for people starting out.

Stoy Hall, Host:

I agree. I agree.

John Henry:

And

Stoy Hall, Host:

all it's doing is it's making. Yeah. Investments a commodity and not something that you have to hire an expert for. And I'm fully behind that where we come into play is everything else, right? That's just part of this pie. The emotional side, helping them make decisions is where it comes into the planning side of things. Where are you? So you obviously have a full time gig and you have your business in planning. Where do you see your business going in the near future? What goals or things do you have coming down the pipe that, that you're

John Henry:

I guess as of today I am, I'm looking at how I have changed my business model and wondering if it was the right move or what might be the next adjustment or transformation. And I say that because I feel like new clients I'm getting are, More similar higher net worth maybe working with me as a bonus or for fun, we get together and talk about the markets and economics and that's great. I enjoy it. I've got a lot of. A lot of these folks are interesting and I learned from them professors and successful people. But but what I feel like this new model I changed to a subscription based model and people can book as many meetings with me as they want. My thinking there was that would make things where I could work with people that don't maybe have a lump sum to, to pay on day one and they can, unsubscribe at any time. And I thought. That would bring in more folks that maybe have never been able to work with somebody or we're struggling financially. But I don't know that that I was right about that. And to be honest I'm not sure. Um, I would like to continue to help people, especially those that might need it the most but it's tough. The economics and the time commitments. So I don't know maybe we can talk offline and maybe you'll have some ideas for me. Really. This is all experimental for me. I've never started a business and I'm still figuring out. How things work with marketing and finance and building a website, all of these. But I'm having fun and and growing, adding folks. Um, I've reached or maybe now past breaking even kind of month over month and that's fun. So yeah,

Stoy Hall, Host:

that's just the, we, that's the real side of it. I, a couple episodes ago I talked about. No one has their shit together. I think that's the biggest thing in this world. When we grew up as adults, we realized no one has their shit together, right? No one has it all figured out. There's always. Something they're working on or questioning, or, for you on the data, that a science thing of everything, it is, it literally is a science. Like we're trying to give and take and figure out what's going to work and what's not going to work. And I, I want people to understand that, that's how your life is as a normal person. That's what you're going through too. And then as business owners, there's about 16 other layers on top of it that we have to deal with for example, like a website. For me, my website went, for some reason, visits went down the last two months compared to year over year. Why? No clue. But we have to figure those things out. And I think it's very important for people to know how these fee things work. And if they go to Google or any of the social medias, our industry loves to fight each other about what models the best, I don't really care what models, what I don't charge you a U M I go more subscription based as well. And what I've learned is people don't gravitate towards it yet. Cause they don't know that you can do that, right? They don't know this new model. I know it's been around for a while, but from a marketing standpoint, they're used to what all of the institutions and big media are talking about. And that's a, you want percentage of something, right? Yeah. Percentage of that. And that's not it anymore. There's a lot more of us that are going, we're going to fit into your cashflow. Pay us monthly. We're going to be here for you regardless of how many assets you have. And that's a different philosophy that just the mass people don't know yet.

John Henry:

Yeah. And I feel like maybe some of the challenges from a psychological perspective is with a subscription, maybe people want to see value. Every month if I have a Netflix, I can watch things every month. And it might be once a year or four times a year where there's a, in a life event that's happened or something that's happened where you can help somebody and maybe that's a high dollar amount, but then a couple of months go by and you don't They don't see that it might be, that might be harder for folks to think about having a subscription. Oh, sorry. My phone's ringing.

Stoy Hall, Host:

Yeah, it does. That's the psychology behind it, but that's where we all have to talk about it more. Like it has to be marketed more and that's a fundamental difference in change, which is, I think the best type of change for people in themselves because they need to have that person. Who no matter when or what happens, they can go to you and either get advice or know and trust you that you're going to do the research or vet out or whatever it is to really help them in the right decision as opposed to Google or TikTok or Instagram or whatever the bullshit's out there, right? All right, as we get to the end of this, I was asked every guest this one question. What is one thing you want to leave all the listeners with? In order for them to take that first step or that next step in moving forward in this, in their wealth journey,

John Henry:

I guess I know you're an athlete like myself. I did football, wrestling, baseball mixed martial arts fighting after that. And you played football. Were there some other sports as well? I was

Stoy Hall, Host:

a baseball football player. Okay. Ran a little track till I told me, but outside of that, yeah, for sure.

John Henry:

Yes. Yes. So. I feel like there's a lot of similarities with sports and mindset and ma making progress w with many things, but, for financial planning or retirement planning, um, the first thing that came to mind when you asked that is, is just get started. F find someone. Or something that where there's some trust and get started knowing that you're green and that there's a lot to learn. But, there can be some fast and easy value from learning and Working with someone, a mentor, an advisor, even if it's an hour just to get started. And I'm thinking about my own kids who are now 20 and 21. But when they were teenagers, I started planting seeds and talking about investments and they got a little Robin Hood account and they had a few ticker symbols and we monitored this. And so something could be very basic. But the mindset and the habit that you can get in like sports, I am thinking of getting somebody to, start working out eating better. Just small things that can make a big impact for, a longer term success. I guess that would be my recommendation is to learn. Learn and keep learning and be humble. And that goes for everybody, not just people starting out, but to get started, to jump in, not, with your life savings into something high risk, but, uh, dip your toe in and and get started. As the sooner people do the better in the long run, think about your future self and Do them a favor by getting started today.

Stoy Hall, Host:

Absolutely. So get started today. You're going to hear it first from John. It's a lifelong journey. Life's a journey, but your wealth is also a journey. There really is no getting rich, quick scheme out there that works. It's an everyday evolution of working on yourself, working on what your wealth does. And like you had said, it's just very similar as working out. If you have a strong body, strong mind, you're going to have a strong fiscal or wealth journey as well. So just take that first step. There's a lot of us here for you.

John Henry:

And the name of my business story makers what inspired that was thinking about your future self. And of course we all want to have fun and make stories today and tell those, have adventures. And I encourage people to do that. But also think about. Things you want to do in the future and setting yourself up to be able to do that have patience and dedication and you'll thank yourself in the future.

Stoy Hall, Host:

Absolutely. We appreciate having you on. We'll have you on again, of course, but if you, anyone has questions or comments or whatever that I always ask one thing on every episode, Just reach out and communicate. You're on LinkedIn, John, I'm everywhere in social media. If you have questions, you want to learn you, whatever it is, reach out to us. We're here to direct you're here to help you with advice, or at least point you in the right direction. So you can take that next first step.

Black Mammoth:

Sponsored by Black Mammoth. Any awards rankings or recognition by unaffiliated third parties or publications are in no way indicative of the advisors future performance or any individual clients investment success. No award ranking or recognition should be construed as a current or past endorsement of Black Mammoth. Information regarding specific awards, rankings, or recognitions is available on the Black Mammoth website, www. blackmammoth. com. All investment strategies have the potential for profit or loss. Investment strategies such as asset allocation, diversification, or rebalancing do not assure or guarantee better performance and cannot eliminate the risk of investment losses. There are no guarantees that a portfolio employing these or any other strategy will outperform a portfolio that does not engage in such strategies. This broadcast should not be construed by any client or prospective client as a solicitation to affect or attempt to affect transactions and securities or the rendering of personalized investment advice due to various factors including changing market conditions. The information discussed in this broadcast may no longer be reflective of current positions or recommendations. While information presented is believed to be factual and up to date, Black Mammoth do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. The tax and the state planning information discussed is general in nature, and is provided for informational purposes only, and should not be construed as legal or tax advice. Listeners should consult an attorney or tax professional regarding their specific legal or tax situation. Past performance is not indicative of future results.

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