Google has an AI assistant that can schedule haircut appointments for you. Tesla and General Motors are both producing cars that can drive themselves.
Of course, in the advisory space, robo-advisors (many of which eliminate human advisors from relationships with clients) have been slowly bringing on more assets and now manage over $200 billion.
As we’ve seen with the robo-advisor “revolution,” artificial intelligence will benefit people, but it won’t replace them. It all comes down to one simple reason: AI lacks human intelligence and the ability to identify and interpret emotions.
In the years to come, advisors’ value will become inseparable from their emotional intelligence and how they can help clients think through difficult situations.
A Changing Role
Years ago, an advisor’s real worth was largely tied to their asset management skills. There are still several firms that tout their fund selection as their differentiator.
But the time of asset management being an advisor’s core value is past. The advisors of the future will deal more with emotional therapy than diagnosing the correct asset allocation in a portfolio.
An algorithm can set allocations and rebalance a portfolio. Only a human advisor can translate unspoken goals, mitigate fears and keep clients on a path to success even in the midst of difficult things like death or divorce.
Artificial intelligence can’t guide a person through difficult times when they are most likely to make poor financial decisions, but that doesn’t mean AI has no role in the advisor office of the future.
Advisors who succeed won’t be in competition with AI, they’ll be in collaboration with it to enhance their client relationships. The most natural place for an advisor’s technology to make an impact is in supporting their client experience.