An all-pervasive feature of modern life is the speed of technological change, and of our collective capacity to adapt to the multiple impacts of change. It is natural to question the benefits: does the constant challenge to keep up and adapt simplify my life or make it ever more complex?
Would a fully-automated advice capability drive better service standards and outcomes for my advice business and my clients, or does it simply make my job redundant? Is all the talk of technological revolution that ricochets around the world out of Silicon Valley, the advent of artificial intelligence and robotics, and the reported demise of human labour inputs loom as a terrible threat, or an amazing opportunity?
Such uncertainty, for many people, drives a somewhat logical reaction of fear. This blog post seeks to address some common negative perceptions for financial advisers and, hopefully, put the fears to rest.
Fear 1: I'm a human adviser... about to be replaced by a robot.
Fear of redundancy by so-called robots is perhaps equated to the re-tooling of modern manufacturing production lines. Does the replacement or augmentation of unskilled labour mean the potential downfall of knowledge and service professionals? In short, will 'robo-advisers' kill off our jobs?
Not really. I've previously stated that I don't like the expression 'robo-advice' for good reason. But leaving that argument to one side for now, let's assume that purported robos are built and rolled out to deliver low cost, simple advice to investors with basic financial needs. Should that be the case, it will not diminish the need of clients to seek a personal human relationship with their adviser, especially as more sophisticated holistic, or complete, financial advice is required.
An algorithm can't empathise with clients' emotions; their concerns and fears.
Robos will arguably help to drive greater client engagement because they offer the promise of affordable and accessible elementary advice. Human advisers have an enduring, critical role to play once a client's foot is in the door - or once logged on to an automated digital advice platform.
No algorithm or robo-adviser in the world right now can deliver a complete answer to complex financial situations involving different considerations such as estate planning, taxation, wealth protection and risk management. Humans are necessary to delivering holistic financial advice.
In recognition of this, the biggest US robo-advisers are introducing people to round out their financial planning services.
Fear 2: Artificial Intelligence (AI) is a growing threat
While there is abundant conjecture about the application of AI, there is no doubt it has a role to play in our lives, and will ultimately deliver measurable benefits. But views are mixed on how we should use and control AI.
A high-profile debate emerged recently between Tesla chief executive Elon Musk, who questions AI's benefits, and Facebook founder and chief executive Mark Zuckerberg, who is a big AI supporter.
"In the next five to ten years, AI is going to deliver so many improvements in the quality of our lives," Zuckerberg recently said, rejecting claims from Musk who has argued that super-intelligent AI could wipe out humanity or compromise its existence.
Musk responded to Zuckerberg's claims on the benefits of AI and said the Facebook founder has a "limited" understanding of AI. There were claims and counter-claims about AI's benefits. Musk has reportedly donated millions to keep AI "beneficial to humanity," and on several occasions, he has said AI could eventually become a threat to humans.
The spat between these two-high-profile technology and business leaders highlights how mixed the views are regarding AI. My view is it will be a longer, iterative process for artificial super-intelligence to emerge. Is there a real future threat of a super-intelligence escaping into the internet? Must we also be mindful about who ends up controlling the technology? Absolutely. Proactive, not reactive, regulation is imperative, to keep the right checks and balances in place.
Fear 3: AI will never happen in my lifetime
Wrong. AI is everywhere.
There is still a major difference between 'intelligence' and 'autonomy' (information processing using data vs human intelligence replication).
Do you really think that chess-playing programs that can beat humans means they have superintelligence?
No. It is a very narrow intelligence. The current play of AI is autonomy, which will evolve to become more predictive and cognitive - to better understand human behaviours and decision-making.
Quantum theory is the best empirically confirmed scientific theory in human history, it is essential to every natural science. The replication of quantum cognition (which uses the mathematical principles of quantum theory to model cognitive functionalism, the brain's information processing, it's decision making, perception, reasoning, language and judgement capability) still has some way to go, so does quantum computing.
Science will continue to lead us down our natural evolution, and I call it evolution for a reason, because AI is the natural progression of humans.
While AI currently cannot do everything humans can, it does have a role to play including in financial planning. Whether it is voice-powered personal assistants like Siri and Cortana, suggestive internet searches and self-driving cars or computer powered light and power switches, there are many examples of AI in use today.
Companies like Apple, Facebook, Microsoft, Google and Tesla are regularly rolling out ground-breaking AI updates and improvements on how we interact with computers and machine-learning technology. We're talking about neural networks from the likes of Google's DeepMind, performing human-like functions without relying on pre-defined behavioural algorithms.
Only time will tell, but right now, let's embrace the AI that we have. Even if we don't use Siri or Cortana, the fact is, we all must talk to computers.