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Martin Bamford: ‘Alexa, when can I afford to retire?’

Technology is improving, but it will never match the human skills of an adviser

I am a huge fan of gadgets. An excuse to buy lots of new kit was one of my main motivations for getting into podcasting.

One side of my office now looks more like a local radio station than the workspace of a financial planner.

A couple of weeks ago, I pushed the boat out with a couple more purchases.

The first was something I have been keen to own for a while. Finally gaining the all-important permission from my wife, I have got myself a DJI Spark drone. As a keen photographer and filmmaker, this was missing from my box of tricks and should provide hours of fun (at least until the batteries run out or it gets stuck in a tree).

Of more relevance to financial planning is the second purchase, an Amazon Echo Dot. These are fantastic devices; a bit like Siri for your iPhone but with more functionality and a bigger library of audio content. You activate the device by saying “Alexa”, then say your command or ask it a question.

Thinking about an inevitable future where advisers are replaced with artificial intelligence, I thought I would put my Echo Dot to the test and start with something easy: “Alexa, when can I afford to retire?”

Imagine my disappointment when the response came back: “Sorry, I’m not sure.”

Now, there is a good chance that advanced robotics has already reached the stage where it can crunch the numbers in seconds and present an articulate answer to a question like this. Maybe I simply neglected to feed enough information into the device to allow it to answer the question. If this is the case, the human adviser is already doomed.

More likely, Alexa does not have a clue when I can afford to retire. My experience to date of Amazon’s clever algorithm is this: when you buy a hoover, it presents you with other hoovers you might also want to buy for several weeks afterwards. It is OK, thanks, one vacuum cleaner is enough.

Apply this approach to robo-advice (the real thing, not automated product sales which have hijacked the label) and we are probably a good 10 to 20 years before machines threaten our redundancy.

Lee Robertson: Advisers need to look at robo-advice differently

Technological advances seem to have largely skipped past the world of financial planning. We have self-driving cars, on-demand television services and augmented reality devices. This is genuinely life-changing and life-enhancing stuff. Yet we still do not have a computer which can relate to humans with empathy, understanding and compassion in the same way a financial planner can.

We are probably a good 10 to 20 years before machines threaten our redundancy.

Ask a robot to analyse a risk profile questionnaire, serve up a model portfolio and allocate money to different tax wrappers, and it can do a decent job. That same computer system cannot sit with a grieving widow to help secure her financial future, tell the daughter of a lady with Parkinson’s disease what she needs to do to claim state benefits and secure care fees, or coach a nervous investor through a period of market volatility.

I have no doubt technology will come on leaps and bounds during the next few years. In the same way the hotel sector faced unexpected competition from Airbnb and taxi drivers have been usurped by Uber, financial advisers will be “disrupted” by an innovation we do not understand just yet.

When this finally emerges, I hope it will allow us to focus on what we do best – the valuable human interaction with our clients – and work away quietly in the background, taking care of all of the paperwork.

Martin Bamford is managing director of Informed Choice


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. If this thing really worked it might have replied “lose some weight Martin old boy or the questions probably academic”.
    That’s what my wife would say anyway…

  2. For those who maintains a aggregator account (such as MoneyHub) that truly reflects actual net worth / income – all it needs is an API for Alexa to access this data – and Alexa would be able to answer the question fairly accurately (based on current spending/lifestyle). So it may not take 10~20 yrs ;). But I completely agree from a relationship building and empathy perspective – robots are still miles away – they’ll need to be able to read facial expression, iris contraction… (remember Bladerunner / Voight-Kampff ? 😉

  3. Technology doesn’t need to ever match the skills etc. of a human, it only ever needs to offer something more than nothing.

    Take automatic car washes for example – perfect if you want to give the family run-around a quick once over but your never going to put a Ferrari though one.

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