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Dale Jackson

Your Personal Investor


That friendly face across the desk or that voice on the phone might be human, but the investment advice that comes out of its mouth is increasingly becoming computer generated.

Investment advisors are increasingly relying on some forms of artificial intelligence to help their clients prepare for retirement – mixing algorithms with quantitative or technical analysis, or computer-generated model portfolios.          

And it’s just the beginning, according to a recent study by technology consultant Accenture. They call it “hybrid advice” where the human advisor will be the point of contact to gather personal information about a client’s goals, risk tolerance and time horizon. From there, AI could monitor the markets in real time and generate customized client reports. The data would be used to find patterns in a client’s investment decisions, identify risks and make recommendations.

Robo-advisors already perform a similar task but according to the study, AI will go much further in directing a client’s investment portfolio. Accenture says firms that provide digital tools in addition to human advisors rank higher than traditional models in terms of customer satisfaction.

The study says human advisors will always be needed for uniquely human skills such as creativity, critical thinking and empathy. But fewer will be needed to service a larger client list. Between 2011 and 2017 the number of advisors with more than 150 clients has increased from 33 per cent to 42 per cent. Accenture expects that trend to continue as demand for lower costs continues.

In addition, the study says human advisors will need more advanced qualifications and standardized services in the future.

It also says commission-based incentives will be a thing of the past, as annual salaries become the norm.         

February is Your Money Month at BNN Bloomberg. For more stories and practical advice on how to employ your money wisely, visit our Personal Finance page.