NEWS WRAP - Approaching AI in the Financial Advice Industry
Are we on the cusp of a brave new world of robo-advisers in the financial advice industry?
If the latest poll from artificial intelligence (AI) innovator Rainbird is anything to go by*, the answer is "yes", with the company predicting the emergence of "meaningful" AI platforms, which, it says, will become integral to the financial advice market over the coming years.
The survey revealed that 72 per cent of financial services firms are planning to introduce a greater reliance on automation over the coming five years, and, tellingly, it is larger firms who are making the most contingencies, with 94% of the larger firms polled saying that they had already earmarked sums for greater investment in AI platforms. **
However, the research found that among some advisers there was reluctance to adopt AI technologies (88.8%) because of fears about a lack of transparency**. The Financial Conduct Authority's Christopher Woolard recently summarised this view when he expressed concerns that
"true robo-advice" might be impossible to regulate because of its algorithmic decision process.*
The Blacktower FM View
It is hard not to meet the news regarding automated financial services with some level of ambivalence; yes, anything that improves efficiency and/or outcomes and reduces costs while also freeing more time for client-adviser interaction is undoubtedly a good thing, but not if it ultimately leads to a downgrading of human service.
Perhaps AI will work for some and not for others; it is conceivable that it will not be the high-net-worth client who benefits from the technology, but instead those with smaller investment sums or those who are unable to afford bespoke financial advice.
Currently, it is difficult to predict precisely where AI will go.
What is certain is that AI can only make the financial advice process "more meaningful" if it enhances human interaction rather than diminishing it. This scenario would mean AI taking over some of the number-crunching, thereby freeing advisers to provide clients with more frontline and personalised support.
This, at least, is the view of Rainbird's chief executive James Duez, "Financial advisers will increasingly be performing specialised tasks that machines cannot. A new generation of AI can replicate human reasoning and make inferences from data, but it cannot empathise with people."*
Human advice from a forward-thinking firm
Blacktower Financial Management has more than three decades of experience in the financial services and wealth management sector. Again and again we have shown our commitment to evolution and innovation while all the time retaining the human qualities that have made us such an outstanding firm.
Wherever you live, if you are an expat and are looking for international financial advice from a team of specialist cross-border advisers, contact your local Blacktower FM office today.
* Poll report on FTadviser.com https://www.ftadviser.com/your-industry/2019/10/04/how-automation-could-change-the-advice-industry/ Accessed 01-11-19
** https://www.blacktowerfm.com/images/73RB_EnterpriseSurvey_A4.pdf Accessed 01-11-19