As AI continues to advance, there have been topicson how necessary advisors will be in the future. Below is our take on artificial intelligence (AI), robo-advisors, and the future of financial advice.
Technological Trends
Robo-advisors are automated tools typically used by large financial institutions to provide inexpensive financial advising for clients. They typically work by a person inputting their information in a survey or form, and an algorithm provides portfolio options for the information given. This tool continues to advance through the improvement of artificial intelligence. While these tools are great for quick, generic portfolio building, they fall short of offering truly customized and comprehensive financial planning.
Robo-Advisors
AI, or artificial intelligence is starting to make its way into the financial advice industry. Most commonly, it is a tool that advisors can use internally to help speed up some of the manual parts of the financial planning process. However, no AI system is perfect. It has been well documented that many AI programs have their shortcomings. While AI may be a great tool for some quick questions and answers, we believe it misses the mark of demonstrating the kindness, compassion, and true listening a real financial advisor can provide.
Will Robo-Advisors Replace the Need for Human Financial Advisors?
At TruMix, we look at financial advising as an opportunity to build a relationship. There are many elements to wealth management; and each individual has different goals, values, and perspectives. And there is value in being able to share and bounce around ideas and topics with your financial advisor. We find that there is much jargon and noise being thrown around, and having a human conversation to filter through information to get to your core values is incredibly important.
We believe that robo-advising and AI tools will be leveraged by the most successful firms in the future. The technology will allow advisors to both provide more services and spend more time with their clients -- rather than spending time performing more manual tasks behind the scenes. Here at TruMix, we are already doing this today; leveraging AI tools to do more work on the backend so we can spend more time helping clients.
The Bottom Line
Financial advising has intrinsic intricacies that are difficult for algorithms to emulate. This can be observed, for example, when artificial intelligence generates a song. The music produced sounds similar to the music we listen to; however, slight differences are separating AI-generated songs from the intrinsic musicality in our favorite songs. We find this is the same for the value in having a personal relationship with our clients.
Overall, we believe holistic financial advising is best left up to us humans.
While technological advancements will shape financial advising, the intricacies of individual financial situations will likely prevent robo-advisors from fully replacing human advisors.
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