This could come in the form of automated alerts based on spending, saving, or unusual transactions that would prompt client or planner action, or even the automatic deposit of money into new accounts once savings accounts reach a certain threshold. Aggregation technology may even pull out spending and investment behaviors in a way that lets the client learn more about themselves and their relationship with money.
Aggregation and planning platforms are also learning from client behavior, helping guide initial client conversations. The fact-finding process is streamlined and customized when technology can, for example, understand that a client doesn't have kids and direct financial professionals not to ask questions that involve 529 plans or other child-related considerations.
On the other hand, aggregation informed by big data may be used for client education on topics they haven't considered yet as their goals continually change and reprioritize. For example, if someone doesn't have kids but it's discovered they may plan to start a family at some point in the future, they could be served relevant information about childcare costs and other costs that non-parents might not realize go into having children. This will better prepare clients to work towards future goals while helping uncover what their most fulfilling life looks like.
This kind of technology will focus on helping planners, especially those without much planning experience, uncover the comprehensive personal and financial picture at the outset of the relationship to ensure that plans are as consistent, impactful and profitable as possible.
Steps Four and Five: Automation And Goal-focused Performance For Developing And Presenting Plans
In steps four and five of the financial planning process, we again see a similar belief from our study that big data and AI technology are impacting or will soon impact these steps:
• Step 4: Developing the financial planning recommendation(s)—64%
• Step 5: Presenting the financial planning recommendation(s)—58%
Planning automation will play a major role in the future development of plans. Today, some technology, particularly that focused on younger clients, can take basic inputs of age and/or income, along with broad assumptions associated with these attributes, to develop starter budgeting and savings plans.
The technology of tomorrow, however, will go much further. Planning platforms will be able to assess plan inputs and surface a series of comprehensive planning recommendations based on that individual's unique personal and financial circumstances. The financial professional's role will involve weighing the merit of each recommendation, along with the reasoning behind each recommendation.
That last point is important: Any form of automation in the future will have the rationale behind every recommendation readily available for both client and planner. Not only will this be essential for compliance, but it will offer entirely new levels of transparency for clients. For less experienced planners, it will be a great educational opportunity and it will serve as an important reference for more seasoned planners.
Following the development of these comprehensive plans, more intelligent technology will allow financial professionals to put performance in context, by demonstrating progress towards clients' clearly articulated objectives rather than vs irrelevant indices. Planning platforms will string together historical portfolio value with future projections, and anchor those projections to the portfolio values necessary at future points to achieve client goals. This helps keep the focus on long term goals rather than short term market movements.
Further, tools overlay actions taken or advice given atop historical portfolio value to help connect the dots between progress made and what specifically has contributed to that progress. Moreover, tools can quantify the impacts of actions on plan metrics in order to put advisors in a position to quantify the value of their relationship with their clients over time.