Advisers no longer fear automation taking their jobs

In a switch from its previous report, the CFP Board is less worried about AI, and more excited about the opportunities provided by technology

Jan 11, 2019 @ 2:46 pm

By Ryan W. Neal

Financial advisers in 2019 are far less fearful about technology replacing them than they were just a few years ago.

In a new report, the Certified Financial Planner Board of Standards' Digital Advice Working Group — a group of a group of senior business executives, industry professionals and thought leaders across financial advice, wealth management and technology — predicts technology will be able to provide fully automated, holistic financial planning directly to consumers without any human financial adviser as soon as 2023. But that doesn't mean it will eliminate the need for a human advisers.

"Technology will enable a lot of the data gathering and analysis and monitoring of someone's financial situation" said Joe Maugeri, managing director of CFP Board corporate relations. "However, there is a need for a financial adviser to work through that analysis, explain it and tell the client some of the implications and how [the financial plan] should be implemented over time."

The 2019 report is notably different from a report released when the group first convened three years ago. Discussions back in 2016 focused on robo-advice and artificial intelligence as a threat to human advisers. A report outlining four future scenarios regarding fintech featured a "Judgement Day" scenario, in which consumers in 2020 preferred holistic financial advice from a digital platform, big technology players dominated the market, and advisers were relegated to niche markets.

"Certain areas like artificial intelligence didn't have as much of an impact in the short run than we thought," Mr. Maugeri said.

Though the CFP Board doesn't see technology as a threat, it does believe automation is having a profound impact on client-adviser interactions. Mr. Maugeri said the Digital Advice Working Group is thinking about how this will influence CFP education in the future — in particular, how advisers will use the time that automation frees up.

"We believe the soft skills, particularly around client psychology, will become much more important in the future for the digitally empowered adviser to be successful with the client," Mr. Maugeri said.

The group sees technology's role as one of amplifying human advisers. As the amount of information and data available increases, technology will become an increasingly mandatory part of the adviser's tool kit.

Firms that have implemented new technologies like customer relationship management software or client portals tend to report a successful return on the investment, according to a separate report from research firm Cerulli Associates. However, the majority of firms also admitted their advisers aren't taking full advantage of the technology.

In the case of CRM, advisers are using the software to collect client contact information and mark important dates, but aren't capturing insights around family members, charitable contributions or life milestones.

"Leaders believe this insight can help identify high-impact outreach opportunities, which nearly two-thirds of advisers recognize as an area where they need help," according to the Cerulli report.

Across all channels, three-quarters of advisers believe they could better leverage the technology they have access to, Cerulli reported. The sentiment is even more prevalent among the wirehouses, which have released a flurry of new technology tools for advisers.

(More: Morgan Stanley launches new adviser technology dashboard)

"The presence of so many new tools explains why advisory teams can struggle in adopting everything in a cohesive and effective way," Cerulli reported.

Mr. Maugeri said adoption will remain a challenge at most firms as technology develops at a faster pace than advisers can learn how to use it. This isn't always a bad thing, as advisers can avoid the pitfalls that can plague early adopters.

(More: Survey finds financial planning most adopted technology, digital trading least)


What do you think?

View comments

Recommended for you

Upcoming Event

May 14


Retirement Income Summit

Join InvestmentNews at the 13th annual Retirement Income Summit—the industry’s premier retirement planning conference.Clients and investors continue to search for retirement income solutions and personalized investing advice. This... Learn more

Featured video


Female leaders highlighted as future of financial advice

InvestmentNews recognized 20 Women to Watch for their efforts to advance the financial advice industry.

Latest news & opinion

Merger mania: Why consolidation in the RIA space is about to explode

The pace is expected to pick up as big firms seek to get even bigger and older advisers look to cash out.

Securities America hit with lawsuit seeking $18 million in damages

Firm is dealing with the fallout from a rogue broker it fired a year ago.

Brian Block continues his legal fight to stay out of prison

A judge denied Mr. Block's motion for a new trial, but he wants another day in court.

10 social media stars you're not following yet, but should be

Some of the great people using social media to discuss wealth management and financial advice who might not be on your radar.

Wells Fargo could be putting more of its focus on wealth management

Speculation is mounting that the bank is dumping some lines of business to focus on just a few areas, including financial advice.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print