Does technology eliminate job opportunities?

Computers can take the place of people for some tasks, but that can free up employees to strengthen client relationships

Oct 20, 2015 @ 11:33 am

By Sheryl Rowling

I'm old enough to remember the early days of computers. There was a lot of speculation at the time. Would computers eliminate jobs and cause mass unemployment? Would skilled professionals or unskilled labor be most at risk? Would computers replace personal interaction in business?

Today, I'd say there was some merit to each question.

In the RIA world, computers can eliminate or reduce the need for certain jobs. However, depending on your firm and your world view, new jobs can be created. For example, rebalancing software can compress weeks of labor into minutes. Engaging a full- or part-time employee to manually prepare these calculations becomes unnecessary when this software is implemented. Yet with the increased efficiency comes the ability to be more proactive with clients and take on new ones. Although human calculators might no longer be required, human planners who can interact with clients and prospects become more critical.

(More: Robo-advisers make it easier for human advisers to show their true value)


This brings in the “world view” issue. If you believe that there is a finite number of loyal advisory clients, then adding capacity will not create new opportunities. In a “zero sum game,” computers can take the place of employees. If there are plenty of untapped populations of potential clients, technology creates new opportunities for different types of work. In other words, if you believe that there is more than enough business available for all RIA firms, computers will not negatively impact the number of net jobs.

Utilizing technology can change the nature of the human tasks required. With this changing landscape, different skill sets might be needed. Does this change lead to openings necessitating more or less education? In the case of RIA firms, I would argue for the former.

Computers can handle repetitive, standardized calculations. Without human input, computers cannot accurately interpret a client's true risk tolerance, calm jittery nerves during market downturns nor address personal financial concerns. These activities are better handled by financially educated advisers. Less skill is needed to merely perform repeated computations.

(More: Bruckenstein: Where advisers need to make technology investments today)

Robo-advisers are taking computer-based services to a new level. Yet I don't believe that robo-advisers alone will take the place of human advisers. RIAs need to embrace technology that makes life easier and more efficient for them and their clients. Clients who want “robo only” service typically are not our target market. However, without modernizing our operations and offerings, the human touch will not be enough to fully engage clients going forward.

The questions we face today regarding robo-advisers are similar to the ones we asked decades ago when computers were introduced. We must remember that progress and change are inevitable. If we don't adapt and accept our transforming roles, we will risk our businesses in the long term.

Sheryl Rowling is the chief executive of Total Rebalance Expert and principal at Rowling & Associates. She considers herself a non-techie user of technology.


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