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With all of the buzz these days around artificial intelligence, robots and the impact these disruptive technologies will have on the future of advice, the best place to find out the latest was at the recently held SS&C Deliver conference, home of the portfolio accounting systems Advent and Black Diamond.

More than 1,000 advisors were regaled at the Las Vegas conference on how these new technologies will profoundly change the way our society will evolve and what that means for advisors, and the way they will practice in the future.

Advisor Ric Edelman kicked off the event, fresh off his years-long research and authorship of his latest book. Edelman has spent countless hours studying with futurists and activists such as Peter Diamondis, founder of the X-Prize, to boil down our future into one word: longevity. With all of the advancements, particularly in what Edelman describes as “exponential technologies,” we as humans will have much longer life spans than most of us can imagine.

“Most of the advice you are giving is wrong,” Edelman said, based on how massively technology will transform client lives in the near future.

Edelman’s thesis is that in the coming decades, humans will live vastly different and lengthier lives, and thus, need a different approach to financial planning and investment management. Edelman provided a non-stop list of how these exponential technologies such as 3D printing, genome sequencing, nano-technology, robotics, the block chain and big data would transform just about everything in the future, including enabling clients to live beyond 150 years old.

“Retirement as a concept will cease to exist,” Edelman said. “The linear lifetime where people go to school, get a job and retire is dead.”

Instead, Edelman says that we will all be living a “cyclical lifetime” with multiple periods of school, jobs, re-training, then on to a new career, and so on with multi-year sabbaticals sprinkled in. As a result, advisors will have to shift their typical approaches of college saving and retirement planning from one-time activities, to being able to fund multiple careers and education over time, as well as to support their lifestyles for nearly a century and a half — an approach that most advisors are not yet considering.

Advisors jobs will be fundamentally different as well, due to robotic automation. “Forty-seven percent of current jobs won’t exist, and not just the manual labor ones, but also white collar jobs as well. In fact, we already have robot attorneys, journalists and baristas,” he said. Accordingly, Edelman told advisors to start changing their approach. “To remain relevant and not get automated away, you will need to evolve your process to become more career planners and health care advisors in order to coach, counsel and plan for clients on these longevity issues instead of just providing investment performance and price,” he said.

In fact, according to an industry expert panel, asset allocation and trading will be driven by AI in larger and larger ways, so much so that it will no longer be dependent on humans. Traders of the future will be talking about which AI to use, which algorithm is best vs. the underlying securities.

Along these lines, the technologists and business analysts from Black Diamond are reading the tea leaves in the short term vs. Edelman’s future, to provide a vision for what the advisory practice of today needs to look like.

Based on the macro-trends, such as consolidation, fee-compression, shortage of advisor talent, the historical generational wealth transfer, shifting consumer expectations and the move to more holistic financial planning and life coaching, advisors will have to do more with less. That means leveraging technology even more than what they are doing to have a sustainable business.

The upshot? “Advisors will need to automate as much as possible, particularly in digitizing the account opening, synching data across systems, creating deep integrations with CRM and workflows, auto rebalancing portfolios while providing an elegant client experience across platforms, including online and mobile,” said Bjorn Widerstedt, senior director for Black Diamond. Widerstedt and his team have been researching various perspectives that advisors need to manage, particularly from the client point of view, to continue to attract and retain investors.

“Don’t make me go to different places to check on my financial life,” Widerstedt says is a common frustration many investors have and why advisors need to provide a comprehensive client portal with data aggregation so the advisor is the central point in investors’ financial lives.

“If it’s faster to do myself, I’ll just take care of it,” he noted as another pain point many of us have in getting things done with a financial institution over the phone, such as moving money, updating information or requesting a change. “Because of this, advisors need to provide as much self-service on their websites and client portals to minimize the friction, leverage their staffs and enable a true 24×7 service experience.”

“I’m willing to pay more for guidance and advice than I am asset allocation,” Widerstedt says is an emerging value discussion clients are having. This highlights the rapid commoditization of investment management and the need for advisors to continue to expand their financial planning and to potentially re-price their services away from the traditional AUM fee, which is backwards from what the client values.

“This stuff is way too complex, I just want to know how much I can spend and still be ok,” reflecting an investor frustration with all of the data, choices and options available to them. “Simplification is critical, so the more you can make it easy and boil it down to the essentials, particularly in the often overlooked area of budgeting, the better advice delivery you will have,” Widerstedt noted.

The conference also highlighted the launch of Black Diamond’s new, next generation Rebalancer, which was built from the ground up instead of relying on third-party resources or an acquisition, according to Steve Leivent, SVP of Advisory Client Experience, SS&C Advent. The new rebalancing platform will provide a robust modeling framework that is flexible as to incorporate models and outside managers. It also will enable tax efficiency via tax loss harvesting and incorporating asset location (assets in taxable accounts vs. non-taxable accounts).

On the trading side, the Rebalancer will have FIX connectivity so advisors will not have to download data and then upload trades to custodians. Other new features are approval workflows to streamline sign-offs and approvals, along with notifications for clients that need rebalancing due to cash inflows or market moves in a clean, intuitive interface.

While there was some fear and angst among the attendees that yes, indeed, the robots are taking over, keynote speaker Dr. James Canton, a former Apple executive and now AI expert, delivered the good news.

“The emergence of AI brings about tremendous economic growth potential across the globe, with the majority of it accruing to the U.S.,” he said. “We will be moving past Moore’s law that shows computing power doubling every 18 months, to doubling every 90 days, and soon in days and minutes.” The economics of AI, according to Canton, will mean an additional $8.3 trillion in global growth by 2025.

Thus, this vast tech horsepower will transform businesses into becoming predictive organizations with all sorts of economic and social benefits that will transform our world in many positive way, he says.

To learn more about what went on at the 2018 SS&C Deliver conference, check out the many tweets on the #SSCDeliver hashtag on Twitter.

Timothy D. Welsh, CFP® is President and founder of Nexus Strategy, LLC, a leading consulting firm to the wealth management industry, and can be reached at [email protected] or on Twitter @NexusStrategy.


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