I've sat in those rooms, and you have too. You know the ones, where some war-weary veteran of the good old days of financial services talks about how they used to walk uphill both ways in a blizzard to every client meeting.
How the account application was as small as a postcard. How they didn't even have calculators and surmised rates of return on the back of a napkin.
We are all told that a return to such days would be a good thing for clients and advisors alike and that all of this technology "stuff" is simply ruining a business that at its core is about helping people save for their future, not do calculus.
But those are not the only rooms.
I have also sat in the rooms, as you may have as well, where a man with a bun on the top of his head, ironic facial hair, a skin-tight suit with no tie on and sneakers remind us all that the dark ages are over. That investors can get everything they need from a website, and the age of artificial intelligence ("AI") will launch us into a conflict-of-interest free panacea of robo-advice.
Here's what I've come to realize: they're both right. And—in their own way—they're both wrong. The merger of financial services and fintech, I believe, should release a revolution no one would have expected – what I have come to call "The Rise of the Humans."
As an industry, we desperately need human advisors to focus on the human aspects of the job.
We need them to abandon the machine work which has become such a distraction. Endless spreadsheets and formulas, workarounds and piles and piles of printed PDFs.
We need them to stop training their clients to use their administrators as the best way to get up-to-date information (this is a recipe for potential errors), and we need them to stop answering calculus questions like "Can I retire at age 65?" with computation solutions – "Let's just take your cost of living today and inflate it by 3.5 percent over 20 years…"
Oftentimes, smart advisors use less than superior tools to do their darndest to serve their clients and in the meantime have lost human connection. Instead, they are buried in paperwork requests, beneficiary changes, balance look-ups and status updates. What have our attempts at machine precision cost us in human connection? Too much.
It is time to alter our expectations of financial advisors. We primarily need to expect them to act in human, not machine ways, and in doing so more than earn their fee. What are the human things advisors do?
1. They pay attention.
No computer can look you in the eye and let you know that your most critical financial secrets are being heard without judgment.
2. They have interpretive wisdom.
Advisors can listen to your stories.
What you learned from your parents about money, how you lost your shirt in a business deal with a friend or the joy that you felt when you paid the down payment on your first house. They can help you discover what these moments mean for your long-term decision engine and all your financial decisions going forward.
3. They can have a conversation.
A computer can transcribe every word you say, but it cannot hear you. It cannot respond with the kind of question that only years of experience could know.
It takes an advisor for finances to be liberated by the power of safe relationships.
4. They offer empathy.
