Last week I had the privilege of speaking at the annual SIFA Conference in Queenstown. The conversations throughout this brilliant three-day event were so insightful and inspiring that I wanted to share some of the ideas from my presentation with you.
‍
‍There is understandably a lot of talk at the moment about the potential for artificial intelligence (AI) to dissolve entire business models and reduce the value of many high-cost services.

But before we assume AI spells trouble for financial advice, I think there is an important question we should first ask:
In the months and years ahead, what will humans likely remain uniquely good at?

‍Stronger, faster… better?‍

AI is advancing at such an extraordinary pace that most models can already perform many of the tasks advisers perform faster, more accurately and without rest – from research and analysis to administration, reporting and monitoring. It’s therefore natural to wonder if financial advice could soon become far less valuable to us.

But there are reasons to be cautious about that conclusion.

Yes, AI is exceptional at processing information and recognising patterns. But financial decisions often involve novel circumstances, incomplete information and deeply personal trade-offs. And, as we all know, AI can sometimes be confidently wrong – often without knowing it.

When the right answer depends on judgement, personal experience and understanding the personality behind the numbers, trusted human guidance remains incredibly valuable.

AI is giving advice a broader appeal

‍AI is making it more economical for advisers to reach more people, more effectively, and help them with more of the financial decisions that matter.

This appears to be an increasingly important trend, with recent global wealth management research, including reports from Boston Consulting Group and Oliver Wyman, pointing to growing desire from people to have just one single trusted provider that helps them with all their financial needs.

The emergence of this “whole of life advice” model goes well beyond managing an investment portfolio to helping people make smarter decisions about everything from cash and savings to debt, retirement and succession planning.

In other words, bringing the pieces together into one connected financial picture.

Being better at the things that matter‍

By removing much of the time-consuming work that sits around advice, AI gives advisers more capacity to better understand their clients, spend more time with them and play a larger role in their financial lives.

And that's important because fast, accurate information was never where the real value of advice sat.

As AI becomes better at more things, those things will become less valuable for humans to perform. Which therefore makes the things humans remain uniquely good at more valuable.

Things like:

·        Understanding context.

·        Weighing competing priorities.

·        Bringing perspective.

·        Understanding emotion.

And that last one matters enormously when it comes to money.

We're emotional creatures‍

Even when we have all the information we need to make a good financial decision, we don't always make it.

Fear can make us sell when we should stay invested. Greed can make us take risks we don't really need. Over confidence can make us underestimate risk. And when markets or circumstances become stressful, our natural instincts can be remarkably unhelpful.

Sometimes the answer is sitting right in front of us and we still struggle to act on it.

That's why having an independent human voice can be so valuable. Someone who knows you, understands your circumstances and is prepared to challenge you when your emotions are getting in the way of a good decision.

A thought for the DIY investor‍

AI is an incredibly powerful new tool, and there is no doubt it will help us all make more informed decisions. That's a wonderful thing.

But I'd be careful about assuming that because AI is good at some things, it is good at everything.

Yes, it can:

·        thoroughly analyse an investment.

·        build sophisticated financial models.

·        and it can even deliver what sounds like very sound financial advice with great authority.

But financial decisions rarely exist without personal context. Which means they cannot simply be treated as black-and-white mathematical equations.

The right answer depends on you – your circumstances, priorities, family, personality, goals and tolerance for risk. Things that aren't always well captured in the data.

That's why, even in an AI-enabled world, I think there will remain enormous value in having someone you trust to help you navigate the decisions that matter.

‍