DALLAS — Emotional intelligence versus artificial intelligence.
That's the ice wall where young planners see the profession warding off an incursion of ever smarter computers into wealth management.
Automation may take some ground in the next decade, they acknowledge, as computers able to converse naturally become commonplace. But contemplating the unknown challenges ahead, the next generation of advisors in the XY Planning Network remain hopeful the human touch will prevail.
"I'm not someone who thinks that technology will never be able to do what humans can do," says Christopher Girbes-Pierce, CEO and founder of planning firm Enlightened Wealth Management. "But this business will do what it always does, which is adapt and adjust. As younger advisors, we will be ready, as change is occurring more frequently and faster now than in the past."
Indeed, a number of projections see machine learning reaching a tipping point within corporate America within a decade, fueled by vast volumes of data consumption. Already, computers have matched human ability to read images. Recently, Amazon's cloud services arm pitched the technology underpinning Alexa to wirehouses, broker-dealers, banks and robo advisors.
It's hard to fathom AI's quick pace of development, says Girbes-Pierce, who practices in Santa Monica, California. "I watched that movie 'Her' too," he says. "For most people, we don't really know. Does it mean these bots will be able to connect on an emotional level one day? It's hard to believe, but I don't think it's impossible."
But not yet, he says, and certainly not in any tactile fashion for some time. "I have a client who I recently inspired to ask for a raise at work. A bot can analyze salaries, but not offer that emotional conversation to help someone muster up the gusto to ask for a raise."
'YOU'RE STILL HUMAN'
Meaningful conversations will never be truly automated, says Jennifer Harper, director at Bridge Financial Planning in Chattanooga, Tennessee.
Computers can provide all the data to a client about their finances, but that's not enough, she says. "We can explain, here's what the numbers say, what the chart says, what the report says, what the Monte Carlo analysis shows. Guess what, you're still a human."
Already, the profession has been changed by rapid technological development, Harper notes.
"When I started in 2000, we didn't have the euro, we were still trading stocks in fractions. We were billing manually. I couldn't have predicted the leaps and bounds in technology we've experienced. Being an RIA owner now, there are things possible on my own today that were not even possible to do with a team of three or four just a decade ago."
But the new developments in technology give Harper hope that more people will have access to wealth management than ever before.
"The definition of advice doesn't change. The way you access it might. Everyone has access to Google. Can you Google IRS publications, can you ask Alexa what the FTSE did? Sure. Does that change any of the discussions with your client about what are their goals, and how do they prioritize them?"
Harper still sees a staggered approach among clients toward tech and wealth management.
"I think there's going to be a spectrum of adoption to technology," she says. "That's even true today. Some of my clients are comfortable doing video conferences, some aren't. Some advisors are virtual only planners now. But there will still be value in one-on-one relationships."
The response is not to fear or ignore technological evolution, says Eric Roberge, founder and CEO of Boston-based planning firm Beyond Your Hammock.
"The best way for us to adapt is to research and utilize all that technology has to offer, and still bring the human component," says Roberge. "I don’t care how good machines get, when emotions are involved, the answer cannot be spit out by a machine. It's not just the best financial answer that's needed, it's the best answer for the individual in context to what they are going through."
Roberge sees fee-only advisors at an advantage in an age of rapid AI development. "We can adapt super quickly," he says, critiquing the slow pace of change inside top-heavy incumbent wealth management firms.
Quote"The definition of advice doesn't change. The way you access it might."
Advisors can learn something from the process of automated advice, Roberge adds, in that it supports the concept of a niche practice. "The more we can focus on specific clients, the more we can repeat our process, and learn to identify challenges for clients," he says.
In preparing for a digital future, Roberge says advisors should develop their people skills.
"Many new advisors are getting trained on the technology side of planning, but are not getting training on effective communication and relationship building," he says.
"Working on your own personal growth and becoming an efficient communicator, that's the best thing you can do for yourself right now. Don’t try to beat the machine, figure out where you can fit alongside it."
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