The regulation writers in Washington, D.C., seem to like robots and virtual cyborgs more than they like flesh-and-blood advisors.
In the retirement advice arena, of course, an automated system, or a mostly automated system that uses a live human as its meat world avatar, will have an easier time complying with the new fiduciary responsibility standards than a regular, flawed, live human.
In the health insurance market, a highly secure automated sales, enrollment and service advice system will probably have an easier time complying with the Health Insurance Portability and Accountability Act (HIPAA) protected health information privacy and data security rules than regular, flawed live humans. Computers don’t gossip.
Computers can get hacked. But at least the owners can use a security system log file to show they complied with the letter of the data security requirements.
They might let hackers move in and make themselves comfortable, but at least they have strong written policies opposing such an awful state of affairs, and at least they are polite and serve the good coffee, not the freeze-dried stuff, when reps from the U.S. Department of Health and Human Services Office for Civil Rights (OCR) come for a visit.
Computers and robots do what they’re told. They will spit out whatever verbiage their programmers tell them to see. They have no whistles, and no lips they can use to blow whistles.
On the one hand, there are probably plenty of advisor “order takers” out there who add little value, and plenty of insurers and advisors who have sold inferior products.
On the other hand, on a good day, retirement and health advisors sell flawed but well-meaning products that aren’t for everybody all the time but work miracles for some people. For some buyers, the products mean the difference between a good, or decent, quality of life and abject misery.
Mentally agile advisors who make a point of keeping themselves well-informed (by, for example, attending trade group meetings, and reading LifeHealthPro.com) can also help bridge the gap between what big companies and big government institutions say about how the world is and how the world actually is. Maybe, for example, advisors can sneak in a few comments about what typical people are really doing about concern X or Y, as opposed to what the official story about what people are doing is.