$1 million or less in assets? You may not be worthy of a human advisor as professionals hand smaller portfolios to AI

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AI is taking over aspects of our health care (1), our jobs, and increasingly, our investments as financial institutions automate (2) customer service, fraud detection, forecasting and portfolio management.

But, while software platforms position their programs as complements (3) to human professionals — helping with risk management, data analysis, and trend identification/prediction — companies may soon be reserving their mortal staff for only their wealthiest clients, relegating the rest to AI support.

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At least, that's what Debasish Patnaik, senior partner McKinsey & Co., has gone viral for implying this week.

Speaking of wealth management customers with investments ranging from $100,000 to $1 million, Patnaik stated in an interview with Bloomberg (4) that "The mass-affluent client now gets something close to private-banking quality from AI," while advisors tend to the needs of higher net worth groups.

It's a shift that is now "fundamentally changing" how candidates are selected in the sector, he said, as the demand for someone who can offer standardized advice suitable for the everyday consumer takes a back seat to the demand for someone who can provide highly customized, personal attention for a certain clientele; or, as Bloomberg puts it, who can meet the "emotional needs of the truly rich."

Though McKinsey itself doesn't deal with individual retail banking customers, it does advise the nation's top financial institutions and shape how they serve their users.

While it's nearly impossible to determine the degree to which algorithms may be dictating where your money goes, it's almost guaranteed (5) that even if you aren't one of the many who use AI directly to make financial management decisions (6), artificial intelligence has some role behind the scenes, as AI adoption across the industry is high (and rising) (7).

Active ETFs that are entirely run by AI (8) may represent a very small portion of the landscape, but the majority of asset managers have been using tech in their work for years (9), at the very least for research (10) to inform strategy.

As much as AI advocates want to see the tech as a panacea for human error (11), though, it has actually been shown to underperform (12) in the realm of wealth management (even worse than active funds generally, which almost always fall behind passive funds over time (13)).

Globally, analyses have found (10) that funds utilizing AI for investment strategies "have not delivered significantly higher or lower performance and have had mixed success among investors."

As one set of researchers wrote in a paper (12) about using algorithms in the stock market: "While [AI programs] can find statistical patterns, they cannot judge whether these patterns are reasonable or meaningless. Only when AI algorithms can understand the meaning of words and their relationship with the real world will they become reliable in important decisions, including investments."

Some argue (14), though, that with the breakneck speed of AI development, language models like ChatGPT have already started to "encode something like the causal constraints of the real world… in a way that is predictive of human judgments of these categories," and thus may eventually be able (8) to outperform humans.

For now, though, experts aren't convinced (15) that algorithms can autonomously handle portfolios more successfully than workers with distinctively human "soft" skills working with AI-powered tools — at least not just yet, even if executives at firms like McKinsey are suggesting otherwise.

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AI has made investing more accessible, but that doesn't mean you have to hand over every financial decision to a machine. Managing money is deeply personal, and many people still want the reassurance of having a human expert in their corner.

For those who want a second opinion, help with building a retirement plan or simply someone to talk through market uncertainty with, platforms like Advisor.com might be worth exploring.

The platform does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests. This can help you easily connect with a vetted FINRA/SEC-registered advisor near you for free.

Here's how it works: Simply enter a few details about your finances and goals, and Advisor.com will comb through its roster and connect you with a qualified expert best-suited for your needs based on your unique financial goals and preferences.

Finding the right advisor isn't always easy — there's no one-size-fits-all solution. That's why Advisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they're the right fit for you.

With retirement costs rising, investors with less than $1 million in assets still need strategies that allow their money to compound over time. Northwestern Mutual's 2026 study found Americans believe they'll need roughly $1.46 million for a comfortable retirement, up about $200K from last year (16).

That's where automated investing platforms can be useful for building lifelong investing habits.

Apps like Acorns allow users to invest spare change from everyday purchases automatically — managed by experts at leading investment firms like Vanguard and BlackRock. This could help you steadily build wealth without having to think about every market move.

All you have to do is link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio of ETFs. Over a lifetime, a little bit of consistency can go a long way.

With Acorns, you can invest in an ETF built and managed by experts with as little as $5 — and, if you sign up today and set up a recurring investment, Acorns will add a $20 bonus to help you begin your investment journey.

Technology can make investing easier, but diversification still matters. Even the smartest algorithm can't predict every market event, and portfolios built mostly around stocks may be exposed when the broader market falls.

Alternative investments such as gold and real estate can help spread that risk. These assets often respond differently to inflation, interest rates, and economic uncertainty, helping reduce the impact of market swings.

Gold, in particular, has long been viewed as a safe-haven asset. Unlike stocks, which are heavily influenced by corporate earnings expectations, gold often attracts investors during periods of uncertainty. Prices are also lower than they've been in months, making it a great time to buy in if you're a believer.

If you're curious about adding precious metals to your broader inflation-hedging strategy, a gold IRA from Goldco lets you hold physical gold and other metals while still getting the tax advantages of an IRA.

They also offer a guaranteed buyback program, meaning they'll repurchase your metals at the highest price according to market value if you ever decide to sell.

If you're curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today. You can also get up to 10% in free gold or silver on qualifying purchases.

Real estate has long been considered another way to protect against market uncertainty. Unlike stocks, which are heavily influenced by investor sentiment, property values are tied to factors such as housing demand, supply constraints, and local economic conditions.

And today, investing in real estate doesn't necessarily mean taking out a mortgage, saving for a massive down payment, or dealing with tenants. You can invest in shares of single-family rental homes nationwide through platforms like mogul.

Founded by former Goldman Sachs real estate investors, mogul handpicks the top 1% of single-family rental homes nationwide for you. This way, you can invest in institutional-quality offerings for a fraction of the usual cost — while receiving monthly rental income, real-time appreciation, and tax benefits.

The team at mogul carefully vets each property, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average yearly return of 18.8%. Their cash-on-cash yields, meanwhile, average between 10% to 12% annually. With investments typically ranging between $15,000 and $40,000 per property, offerings often sell out in under three hours.

Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.

— With files from Becky Robertson

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Nature (1); Datarails (2); Lumenalta (3); Bloomberg (4); Obsidian Wealth (5); EY (6); Fintech (7); Forbes (8); FT (9); ESMA Europa (10); Bitlyft (11); AI base (12); Transparently (13); Brown University (14); Morningstar (15); Northwestern Mutual (16)

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