Why REAL Financial Advisors Won't Be Replaced
When robo-advisors first appeared, financial advisors seemed to fall into two camps:
- Investors will never trust an algorithm to manage their money.
- I'm going to lose my job.
Both reactions missed the bigger point. I think robo-advisors may have missed it too.
The reality is that technology will continue to find things to automate, and it will replace them. I don't care if it's jobs on the factory floor or jobs rebalancing investment portfolios. It will happen, if it hasn't already.
The Real Value of Financial Advisors
But, and this matters a lot, technology can't replace the valuable human aspects of what makes working with a real financial advisor so valuable. That's why whenever I hear advisors worrying about being replaced by a robo-advisor, I like to remind them of two things:
- An algorithm won't stop an investor from doing something stupid. Markets take a nosedive and an investor's very human response is to sell, sell, sell. Robo-advisors can't stop someone from making an emotional decision that hurts them in the long term. A real financial advisor can.
- An algorithm doesn't have the ability to listen, to empathize, and to care. I know this sounds touchy-feely, maybe even like a waste of time. But as I've discussed before, your clients need to know you care. Yes, your technical skills still matter. However, if you want your clients to trust you, if you want them to be honest with you, you need to practice these soft skills.
I'm betting you didn't cover either of these topics in your professional training. I know they weren't in mine. It's something I've had to figure out over the years, and I probably wouldn't believe that they mattered if I hadn't seen it myself.
Understanding Your Role as a REAL Financial Advisor
I know it's a big leap, and maybe even a new idea for many of you.
After traveling the world and hearing from financial advisors everywhere, I know there's fear about what will happen next. How do you stay relevant as an advisor? How do you help people deal with their anxieties? How do you deliver real value?
If you liked this article, I think you will LOVE what I am building at The Society of Advice.
Mortgage Broker | Home Loan Broker | Commercial Loans | Business Loans | Car Finance | Equipment Finance
8 年Great post and good points. Enjoyed it!
Advocate promotor of the re-introduction of coffee export from Venezuela. Looking to raise capital for infrastructure requirements in the agriculture sector.
8 年technology dramatically reduced the price of our TVs and we are all happy about that. none of us really care about the workers in that supply chain what they are getting paid. why should the general public worry about what a adviser makes $$ , they dont.. nor should they . An algorithm is clear concise void of emotions and consistent, always ON with confusion emotion jargon comes over charging $ ill take the algorithm every day and pass it on to my clients for $500. ?? happy days
Director, Changing Gears
8 年Our experience in working with mature age employees contemplating exit/transition is the need for dialogue/coaching with trusted professionals