The Human Advantage

Now, Ellie, I'd like to begin with what might sound like a rather strange question.

Over the last couple of years, we've all been asking whether artificial intelligence is going to change financial advice.

I'm beginning to wonder whether that's actually the wrong question.

Ooh, now I'm intrigued.

Um, it's got my attention, so, um, you're gonna have to tell me why you think it's the wrong question, Lee.

Well, because technology has always changed financial advice.

Mm.

Computers changed it, internet changed it, platforms changed it, cash flow modeling has changed it.

Now AI is changing it again.

None of that feels particularly surprising.

What interests me much more is something else, and that is what happens to the value of advice when technology becomes exceptionally good?

I think that is such a fascinating distinction to make.

Um, I suppose if you ask whether AI will change advice, the answer is almost certainly yes.

Um, in fact, it is already happening, isn't it? Um, what we're seeing with firms using AI right now is summarizing meetings, um, drafting suitability reports, um, search the regulations, analyze portfolios, even helping prepare client communications.

So it's not something, uh, the technology isn't something on the horizon.

It is here right now, isn't it?

That's right, yeah.

But none of those things really answer the question I think clients care about.

Okay.

Clients don't wake up wondering whether their advisor uses an artificial intelligence.

They wake up wondering whether they're making the right financial decisions.

Mm, so true, and of course, whether somebody understands them.

[chuckles] Yeah, because that's the word I keep coming back to, understanding.

Technology can process information, it can analyze, it can compare, it can even recommend now, but understanding another human being feels rather different.

Yeah, and I think that that's particularly relevant when you think about the direction of travel from the regulator as well.