Alexa, can you be my financial planner?

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Artificial intelligence is getting more sophisticated, but where does that leave the professionals?

I asked that question of my new device, a birthday present from my son. The answer? “I don’t know that.”

But for how long?

Just as other industries have been disrupted by technological advancement, so, too, will the financial industry.

Unless planners take advantage of innovation and the rapid consumer adoption that follows, clients are likely to embrace robo advisors over humans. Artificial intelligence is getting more sophisticated, but where does that leave the professionals? If forewarned is forearmed, then we need to be on the lookout for what will change first.

Here are my predictions:

1. Market data and geo-political climate — instantly available:
The first, most powerful change — which is already beginning to happen — is the ability to access an enormous trove of financial data immediately on our devices. No more row after row of mind-numbing numbers. Just as your car’s dashboard tells you if it’s safe to drive, so, too, will your device help you make financial decisions. Everything about the state of markets, the historical context of transactions and all possible scenarios to consider will be available to you and your client — all in a user-friendly format.

2. Spending:
Much of this data is already captured and analyzed. The change? Digital natives who use their phones to shop, pay bills, save, and invest will expect it to be available to them on their devices. Already credit card companies graphically depict expenditures by type and category. Soon the information will be gathered into app across multiple devices allowing for instantaneous, meaningful analysis. The data will be integrated with other client services for action as needed, such as a discussion, possibly with Alexa. If we as planners don’t cater new client habits, that is.

3. Health care:
Baby Noggin, a software startup, is already helping new parents track their child’s cognitive and physical development, seamlessly sending the data to their pediatrician. The doctor and the parents have a head start. By not needing to wait for the next appointment to spot an issue, they can act. The insurance industry pays for Baby Noggin’s activity because early detection leads to better outcomes and less medical expense.

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No more row after row of mind-numbing numbers. Just as your car’s dashboard tells you if it’s safe to drive, so, too, will your device help you make financial decisions.

What does that mean for our industry? Imagine how soon your client’s blood pressure, stress level, digestion, heart health, mental assessment, emotional state, and exercise regimen will be fed into planning software for instant updates for your clients and you. There will be more guesswork on significant variables in any financial plan. In fact, such data may even dictate costs and strategies.

4. Family circumstances
In addition to health care, family data will also be accessible, thus providing the bigger picture for possible financial plan revisions. This will negate the need for you to continually question your client. The information will already be captured. Like it or not, data on individuals, if no longer owned by companies like Alphabet or Facebook, could soon be owned exclusively by the individual, then managed more consistently and prudently by your clients. They will then be able to opt to share data with you.

5. Business/ employer status:
As the advisor, you’ll automatically receive real-time updates about your client’s business or employment status. Eventually, the data will flow without human prompting. Your client’s status including bonuses and raises will be available as soon as that information is known. Your client will set up this transfer of data easily, and security issues will be guarded by technology — or at least that is the promise — just like hospital records or your doctor’s notes today.

6. Legislation, regulations & taxes:
Forget "reading the world" to stay apprised of every existing, possible, and probable tax law that could affect your clients. In the future, all data will be curated, analyzed and fed back to you far more rapidly than imaginable today. How? AI will predict, and instantly feed information, along with probabilities and solutions, back to you.

While security on any of these advances may not be perfect, the trend toward increased data sharing and storage is here to stay. Remember when no one thought consolidated reporting was feasible unless done by manual entry?

The bottom line? We should modernize the financial planning process, explore fintech, be open to new ways of thinking about personal data, and capitalize on the sharing and storage trend to the benefit of our clients – not to mention the long-term viability of our firms and industry.

This article is adapted from Wealth Management Unwrapped Revised & Expanded, by Charlotte Beyer (Wiley 2017).

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