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Financial Advisors Will Not Be Replaced by Technology, They’ll Benefit From It

By Kevin Keller, CAE February 04, 2019 LinkedIn

Technology has already significantly advanced the financial planning profession, but technology alone will not improve the delivery of financial advice. Technology is just one aspect of the digital financial advice ecosystem. According to a report from CFP Board’s Digital Advice Working Group, the ecosystem is comprised of five segments – technology, consumers themselves, regulation, firms and advisors – that combined allow for better delivery of financial planning advice.

Consumers are becoming more comfortable with digital financial advice and now expect technology to be a part of the relationship with their advisor. At the same time, they want a human connection when receiving the advice that greatly impacts their lives and families. Because financial planning is an inherently emotional and human topic, technology will never fully replace human advisors. Instead, it will continue to be a tool used to elevate financial advice.

In a phrase, the best financial advice is human delivered and technology enabled.

The coming years will see technology that is more scalable, accessible and useful in the consumer-advisor relationship, according to the report, which was developed by the Digital Advice Working Group and Heidrick Consulting. It will streamline many of an advisor’s time consuming and repetitive tasks, allowing them to expand their role from a coach who provides solutions to both a coach and counselor who helps clients understand and navigate their lifelong financial journey. Advisors go beyond the number crunching services to provide the full story behind the data and generate insights on how it will affect their clients’ day-to-day lives. Beyond the day-to-day, advisors can develop holistic financial plans that take their clients’ long-term goals into consideration. They can personalize the plans as the goals evolve over the course of a client’s life – from funding educating to enjoying retirement.

Only a human can understand, interpret and respond to the emotions driving a client’s decisions. The best, most advanced technology cannot have empathy and cannot navigate the difficult conversations that are associated with discussing finances. Every person’s financial situation is unique, and to receive the best advice possible they need personalized attention along their financial journey – not just numbers on a dashboard.

Financial planning technology is best used when it creates more meaningful conversations and longer-lasting relationships that produce better outcomes – for both clients and advisors. Financial advisors that use technology will not only better serve their clients and improve their relationships, they will also set themselves apart from the competition. While having innovative technology is important to stay competitive, advisors must know how to optimize it to add the most value to their clients. Firms that continue to invest in both digital platforms and in the digital skillset of their advisors will stand out.

Looking forward, technology will continue to drive innovation, but it will never replace the human element inherent in the financial planning profession. The future of financial advice belongs to those who can marry the relationship between technology and the skills, like emotional intelligence, that only humans can provide.

The original article was published on LinkedIn on February 4, 2019.

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About the Author: Kevin Keller, CAE is Chief Executive Officer of CFP Board. Under his leadership, in support of CFP Board’s mission to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning.