After all, we now have technology that does the vast majority of the heavy-lifting in an array of planning processes, including fact-finding, risk profiling, obtaining market quotations and drafting suitability letters.
We have algorithms that perform tasks of vast mathematical complexity, processing huge dumps of data and comparing a variety of financial products on behalf of our clients in seconds.
All of this means more people can be served in less time. And the bigger your firm is, the more this principle applies, right? Well, actually, I would say that’s entirely the wrong way of looking at this.
Let me explain what I mean. We engage with technology daily. It is a natural, normal part of our everyday lives that provides value not just in our professional hours but in our personal time too.
But in business, we don’t view it in this way. Instead we view it as a tool in our quest for productivity. The problem that we have with productivity is the definition of how we measure it is a definition that was invented 200 years ago in the Industrial Revolution.
It is a cold economic equation that fixates about efficiency; output divided by input.
When you think about productivity in those terms, you worship the process of work, not the outcome of work.
And we are now wedded to processes inside our organisations and our industries that for the most part, were invented 200 years ago.
We work like we are Victorians but we use amazing 21st century technology to make those old Victorian ways of working a bit quicker or a bit cheaper.
You don't need me to tell you this is not supposed to be the gift of technology. The gift of 21st century technology is to enable us to achieve different objectives, working in different ways.
We are going to be able to use A.I. to automate a large portion of what we do today – arbitrarily, let's call it 30%. Whether you’re a financial planner, an accountant or a doctor, your success will be measured by what you choose to do with that 30%.
There’s a great example of this in medicine. It takes a good oncologist about five hours to look through the scans of a single patient and make a diagnosis. Tools that use machine-learning can reduce this to 30 minutes. This presents the oncologist with a choice: process more patients or do more of the things that robots can’t do, like spending time with patients to reassure them and talk through diagnoses. In a world of heavy competition with many service providers offering similar services for similar prices, the organisations that will thrive in the future will be those that choose customer value over throughput and cherish effectiveness over efficiency.
This is a key challenge for financial guidance and advice and the answer isn’t about doing the same tasks as the algorithms, it’s about adding value as humans.
Dave Coplin wrote for Wealth Wizards’ recent collection of articles on the digital future of financial advice. Click here to download “Should Old Acquaintance Be Forgot – The Digital Future of Financial Advice”.
You can also read more content from Wealth Wizards's event in November, Adapt or Die here.