Jul 6, 2018
Personal Investor: Human advisors giving way to artificial intelligence
By Dale Jackson
Imagine your financial fate being determined by a machine.
It’s not far off, according to a new study by technology consultant, Accenture. It paints a future where investment advisors defer much of their decision making to artificial intelligence (AI).
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 when needed rank higher than tradition 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 low costs persists.
The study says human advisors of the future will need more advanced qualifications and standardized services.
It also says commission-based incentives will be a thing of the past, as annual salaries become the norm.
