By Integrating and embracing technology in financial planning.
The other day, I went old school with my kids – we watched the original Knight Rider! My boys were unimpressed to begin with, until woah! It’s a car that talks, and processes everything but human emotions, and self-drives. At this point, my son said, “I guess that’s where the idea for Tesla came from.”
I had to smile, but it got me thinking. In today’s artificial intelligence world, everyone is working at teaching computers how to think and reason. But, the future we’re facing with computers isn’t just cars driving us around, or your house automatically shutting the windows when there’s rain in the forecast. AI is going to affect how you invest your money, and even beyond that, you may at some point talk to an actual robot for financial advice. My thought here is, go back and watch the original Knight Rider – as cool as Kitt is, that car has not learned human emotions.
Now, I won’t suggest that computers can never do what I do – hey, there could be a Dave Smyth 8.0! I know, you’re thinking, “a future with a bunch of Dave-bots! Woah!” I mean, do you really want Dave 8.0 following you around? (Um, no.)
So, what should we expect from so-called robo-advisors? Personally, as an advisor, I’m excited about the idea of incorporating and integrating this kind of technology into my practice. At our office, probably five or 10 times a day, we get calls from folks who’ve forgotten their usernames or passwords. It would be great if Dave 8.0 could handle those calls. But even beyond that, I think robo-advising could be a good thing for our industry, long-term.
I’ve read about all the advisors out there who are afraid of robos taking their jobs. But I look at it differently. I’m excited about using technology in the best way possible, while still taking full advantage of the human knowledge and emotions we do have. People work with advisors because we can do things our clients can’t or don’t want to do. The way I see it, a robo-advisor could help me grow my practice by doing many of those mundane things in the day-to-day work stuff that I don’t want to do. I believe that we will get to the point where robos can do a lot of services, such as withdrawals, deposits, account balances, login information, statements – but there will still be a huge gap between robos and humans.
When clients come in and ask whether they should pay off their mortgage or save for college, robo-advisors are simply not there in terms of answering that question. Each client brings a unique set of circumstances that could change the answer we give. Alexa and Siri can do a lot of things, but remember that recent news story about the robo-doctor who informed a man that he was dying? The family was none too pleased, obviously. There are still many, many situations where human touch simply cannot be replaced. They can’t ask you how you feel about debt, or risk, or know what will help you sleep at night. But when you work with our team, those are the things I learn about each and every one of you. These are the things that allow me create a plan that’s customized for you – not universally applied to everyone.
My point here is that, while I love and embrace technology and try to incorporate advancements into my office (and home!) when it makes sense, I don’t see robo-advisors replacing me. This business is all about the relationships we form with our clients, and that’s irreplaceable.
Article by David Smyth, CLTC, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.