Most of the early AI tools for advisors were built by small startups that sold them on a standalone basis. In contrast to the larger incumbent platforms where new products or features can take multiple months or years to roll out, smaller companies could move quickly, going from an idea and a business plan to a minimum viable product in as little as a few weeks. Which meant that a developer who had an idea for an AI tool that could, for example, take notes and summarize client meetings or analyze market data or research prospects or extract information from PDF documents, could quickly spin up a product and start selling it. And at the time, there was a seemingly clear growth path for those companies since there was essentially no competition from the established incumbent players.
Which is why today there are numerous "AI for X" providers on the Kitces AdvisorTech Map, from AI notetakers (like Jump, Zocks, and FinMate AI) to tools for investment research (like Nextvestment, Qdeck, and ARQA), proposal generation (like VRGL and Sherpas), prospecting (like FINNY, Wealthfeed, and WealthHawk), and document extraction (like Powder and Flextract). All of which came about at a time when few, if any, of the larger incumbent AdvisorTech providers in core categories like CRM, portfolio management, or financial planning software offered anything similar on their platforms. And so for advisors who wanted to be early adopters of AI technology, the options were to either use a standalone provider or to wait and hope that one of the providers that the advisor already used would roll out similar capabilities – which could be a months or years-long process, if it ever happened at all.
But although incumbent technology providers may have been slow to introduce AI capabilities into their platforms, it's always seemed inevitable that they would start to do so eventually. And in the last few months we've now seen a flurry of AI-related announcements from established AdvisorTech providers, from Wealthbox's introduction of an AI notetaker followed by newly announced agentic AI capabilities to Orion's launch of its Denali AI overlay to Altruist's market-disrupting Hazel AI notetaker and tax planning tool. All of which go to show how the momentum in AI innovation in AdvisorTech seems to be slowly but inexorably shifting from the small standalone startups to the bigger multifeatured incumbents.
Yet another sign of this shift came this month with RightCapital's announcement of its new SmartImport feature that's designed to extract data from client documents to automatically populate data within the client's financial plan. For example, an advisor can upload a client's investment account statement to create a new investment account on the client's balance sheet and populate the holdings information (or update holdings on an existing investment account). Or they can upload a client meeting summary that includes key changes to the client's plan which the software will flag and propose changes for – for example, if the client discussed a planned upcoming vacation during the meeting, then upon uploading the meeting notes the software will create a new expense item for the vacation which the advisor can approve and add to the client's plan. Or the advisor can upload financial planning documents from a different software platform like eMoney or MoneyGuide to speed up conversion to a RightCapital plan (either for a client who moved over from an advisor who was using a different planning software or for an advisor who is moving their whole client base from one platform to another).
But what's perhaps most notable is that RightCapital is bundling SmartImport into all of its pricing tiers at no extra cost – and by doing so has effectively eliminated any reason for RightCapital users to use a third party solution for document extraction, or to pay for a higher pricing tier of a solution like Jump or Zocks to be able to extract data from documents and export it to RightCapital. Which is an ill omen for standalone document extraction providers like Powder and Flextract: If the function that's the main basis for their business model can be rolled out as a "free" feature by a provider that a large percentage of advisors already use (and it seems to be only a matter of time before other major providers like eMoney and MoneyGuide introduce their own document extraction tools), the market for the standalone providers could shrink considerably. Their main hope might be that their existing users will stick with them out of familiarity (along with some ancillary benefits like being able to export data to other platforms besides financial planning software, though in practice that's where most of the pain of data entry occurs for financial advisors) – but the problem there is that the switching cost from one data extraction tool to another seems fairly minimal given that the client data doesn't actually "live" in the tool but is just extracted and exported to other tools, which makes standalone data extraction providers particularly vulnerable to being undercut by competing tools from incumbent platforms.
From a broader industry perspective, the steady stream of new AI features from bigger incumbent platforms raises daunting questions about the future of countless "AI for X" tools on the AdvisorTech Map. Pressure from incumbents has already started to cause price compression in the AI notetaker category. Morningstar's recently announced AI assistant that will be embedded in its Direct Advisory Suite will undoubtedly put pressure on standalone AI-powered investment research tools. And it seems like only a matter of time before a portfolio management platform like Orion, Advyzon, or Black Diamond introduces an AI proposal generation tool that could eliminate the need for advisors to use a standalone tool like VRGL.
In the end, there will always be a contingent of advisors who prefer "best-of-breed" solutions over "all-in-ones", and who don't mind paying extra for a third-party tool if it delivers a better experience. But there's a thin line between the type of technology that's important and differentiable enough that there's really a market for providers who offer it on a standalone basis, and what's better suited as a feature that's part of a tool that advisors already use. As the trend of incumbent technology providers expanding their own AI capabilities continues, it will become clearer where that line falls for the various use cases of AI for which standalone tools have cropped up in the last few years - in other words, which of the early AI-based startups simply benefited from having little competition from incumbents at the time, and which had business models that can endure even when an established player like RightCapital enters the picture.
This article first appeared on the Nerd’s Eye View at Kitces.com at https://kitc.es/advisortech-april2026, and has been reprinted here with permission.
Ben Henry-Moreland is a Senior Financial Planning Nerd at Kitces.com, where he specializes in writing and speaking on financial planning topics including tax, practice management, and technology. He also co-authors the monthly Kitces #AdvisorTech column. Drawing from his experience as a financial planner and a solo advisory firm owner, Ben is passionate about fulfilling the site’s mission of making financial advicers better and more successful.
Michael Kitces is Head of Planning Strategy at Focus Partners Wealth, which provides an evidence-based approach to private wealth management for near- and current retirees, and Focus Partners Advisor Solutions, a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.
In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.
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