Updated: May 2
For this month's 'For Your Consideration' submission, I'm going to open up to all of you reading this article. Since clients and prospects are willing to share some of their most personal concerns with me, I'll share one of my own (albeit, a completely irrational one).
Since I began my career I have had the irrational fear of my profession one day becoming obsolete. Now, I admit my job is a little different than the old-timey Blacksmiths, the number crunches of yesteryear (replaced by a pocket calculator) or personal travel agents (replaced by the internet). But with technology becoming more and more advanced, and Artificial Intelligence seemingly around the corner, is the longevity of Financial Planners at risk?
When I think about this question rationally I know the answer is 'no'. The services I provide are so driven by emotion and the psychology of human behavior that I'm confident technology isn't even close to replacing the planner/client relationship. I view technology, like robo-advisors, as a tool, not a competitor. I view advancements in the industry, like discount brokerage services, as a blessing for my practice and the services I provide.
However, what is unquestionable is the advancements that have been made with the availability of information and ease of access. The answer to 90% of life's questions is a hand held device away. The need to have a professional provide clients with earning-ratios information, dividend yields and other analytical variables related to stock picking is becoming less and less important. Easy access to knowledge and the aforementioned discount brokerage services will likely one day make the traditional stock brokers a thing of the past.
Despite the advancements society has made with technology, I still think my career is safe....for now. The backbone of Financial Planning is the ability to understand a client's emotional relationship with his/her finances and to educate accordingly. Technology is not even close to replacing that model.
Now back to my fear....when will technology catch up? My parents couldn't operate a VCR. My children (ages 6 and 2) can both operate an Ipod and a TV remote with ease. That's a scary jump in technological know-how. Their favorite app., Youtube, tracks the videos they watch and then recommends videos they may like. When I use the service I find that the 'recommendations' are hit and miss as to whether they fit my interests, but even 50/50 is an impressive batting average for a computer.
Moreover, the process of learning has advanced. My daughter can read books as a kindergartner, whereas I don't remember being able to read until well into first grade. I was recently shown an 8th grade syllabus of financial topics that I once taught to pre-collegiate students just a decade ago.
It may only take one or two more generations before technology has mastered the ability to read emotions, understand human behavior and make 'recommendations' accordingly. One day humankind's ability to access information may become so advanced that making bad decisions or second guessing your decisions will become passe.
While it's more likely than not that we'll always be hungry for sound advice, if only to save time and avoid bad decisions, time will tell how much of a role technology will have in providing that advice. Hopefully, I will always be the one telling the computers what to do, and not the other way around.