PricewaterhouseCoopers recently was quoted as saying: “To succeed in business today, you don’t need a digital strategy; you need a business strategy…for the digital age.” In other words, the digital age is already here and you must not think about ways to anticipate it but ways to deal with what has already occurred.
Financial planners are, nonetheless, of two minds about what is occurring. They believe automated advice tools are negative as well as positive. But more and more they see at least some tools complementing what they are doing.
The article says:
Automated advice and fintech tools enable financial planners and financial advisors to increase practice efficiencies or cost-effectiveness; serve clients who are younger, lower-income and with fewer investable assets; and free financial planners to devote more time to activities that bring added value to clients.
Planners see fintech as a way to manage “know your client,” transparency and disclosure requirements through automation to ensure that all requirements have been met.
Planners see positives in numerous ways. They see fintech as contributing to increased efficiency and accuracy. They see it helpful when it comes to disclosure and helping them know their client.
Additionally, planners believe fintech may help reduce biases and conflicts of interest for both the client and the planner. And they believe fintech can help with making presentations and other forms of interaction more engaging and persuasive.
Big data is another area where planners find potential value as they can use fintech to help clients in terms of understanding the largest trends in terms of instruments and populations; likewise, scenario planning is another area where fintech can be brought to bear for purposes of explanation and real-time discussion.
Finally there’s empowerment and general financial literacy. Fintech can give clients the ability to better understand their progress and track how it is unfolding.
None of this should be used by itself, but on the contrary, within a larger financial planning context. Planners still believe the intimate nature of their craft demands personal communication that cannot be replaced by technology.