- Artificial intelligence (AI) is already being used by advice businesses
- Over 30% of advice businesses believe AI and machine learning will have the greatest impact on advice practices in the next five years.
- AI can create efficiencies without replacing the human element
Artificial intelligence (AI) isn’t necessarily part of a far off future—it’s part of adviser businesses now.
Media coverage of AI tends to focus on the negatives of a working world where humans become redundant. But AI technology combined with a human touch may just be a turning point for advice businesses—saving time on tasks that can be automated frees advisers up for real customer engagement.
And many advisers are already anticipating the significant impact it will have on their industry. The 2018 Netwealth AdviceTech research report found that 31.15% of advice businesses see AI and machine learning as having the biggest impact on advice businesses in the next five years.
Joel Robbie, founder and CEO of AI platform Nod, and Jason Winderbaum of Sanlam, recently spoke with Netwealth about AI and machine learning basics, how it's being used in the industry and why advice businesses shouldn’t be afraid of an AI future.
Giving machines brains
It’s easy to put AI and terms like machine learning and neural networks in the ‘too hard’ basket.
Joel from Nod—an AI platform creating real time advice documents for financial planners and accountants in their own language and style—says AI is simply a computer simulating human cognitive functions.
“Machine learning is an aspect of AI that gets talked about a lot,” he says.
“That's a machine taking lots of different data points and outcomes… and understanding how to produce a very similar outcome itself. We use natural language processing (NLP), machine learning and deep neural networks to produce content for our documents.”
Jason from Sanlam—a multinational financial services company soon to launch an AI investment products in Australia—says at its heart AI is about giving computers a brain.
“It’s really the science of creating machines that can think,” he says.
“Think of it as a bunch of really smart science and tech people building hardware and software that can learn, adapt and evolve autonomously without any human involvement.”
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Joel says natural language processing (NLP) is a key example of how the AI universe helps businesses grow, rather than replacing the human element.
“NLP is the ability for a computer to understand human language, in the same way that you do when you're reading the paper in the morning,” he says.
“AI can learn from past statements or advice documents… and work out how to produce a response to a new client situation, for a particular adviser.”
Jason believes that AI should become an invisible part of a seamless advice business experience.
“The goal of AI should be to become the new electricity. It should fall into the background and solve problems,” he says.
“Within wealth management, AI is being rolled out to automate tasks that used to fall to analysts—like collating regulatory filings, company reports and financial statements.”
But some AI opportunities may not be immediately obvious to advisers, says Jason.
“A lot of tech companies are playing catch-up, but I expect we'll soon see innovation for advisers in fields like regtech, fintech and the evolution of robo-advice 2.0,” he says.
“As it evolves, it will be integrated into adviser platforms.”
Will AI replace advisers?
It’s the question on every adviser’s lips when AI and machine learning become part of the conversation. Will robots and algorithms push you out of your job?
Joel says AI creates opportunity rather than sounding the death knell for advisers. By taking over document generation and modelling, advisers can focus on client engagement and interaction.
“Financial advisers add the most value by talking to clients, making them feel good about their financial situation and making them feel secure,” he says.
“Anything that gives you more time to focus on that is a plus. Take away some of that manual work with AI technology and you’re buying yourself more time for human interaction that customers want.”
Jason says we shouldn’t fear AI reaching or surpassing human intelligence, at least not in our lifetimes.
“We don't even understand cognition to its fullest potential, and that is really the starting point of creating general AI,” he says.
“AI is real right now and improving outcomes in multiple industries … but these machines are “idiot savants”. We’re still scratching the surface.”
Why AI and humans working together is the future
AI is more than a new tech trend you can afford to let pass you by, or catch up down the track when everyone else has ironed out its bugs.
Joel says advisers need to understand how it’s going to impact their world.
“A lot of people get scared about AI and how's it going to change the industry. Is my job still going to be around? But AI works best when it's paired with a human,” he explains.
“It’s really hard to code for empathy—which is where an adviser should shine. That's very hard to have a machine to replace. Amazing things can happen. Embrace it.”
Are you ready for the brave new world of AI?
Find out more
Read more about AI and machine learning as part of the future of AdviceTech in the 2018 Netwealth AdviceTech Research Report.
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