People + technology: better together

Science fiction writer William Gibson famously noted that “the future is already here – it’s just not evenly distributed.” Without wanting to contradict Gibson, anyone who owns a mobile phone is part of a future defined by artificial intelligence (AI) and its understanding of our behaviour and desires.

Wednesday, February 21st 2018, 1:34PM

by Scott Alman

Our mobile phones know us better than we know ourselves. They make lifestyle recommendations and, almost without us knowing it, filter our choices.

According to a Cambridge University study, AI can accurately predict psychological and demographic traits based on only a few social media interactions. More recently, a joint study between Stanford and Cambridge showed that AI can rival even a spouse’s insight into personality. Algorithms are beginning to anticipate our needs.

AI is also affecting the financial services world. One only needs to look at increasing global inflows of assets via Robo or digital only options. No adviser, no BDM, little advertising. Fully digital sources of financial advice will become ubiquitous.

This may suggest that there is no place for personal financial advice in an AI driven world. Surely an app could do it all!

Absolutely not.

Only people can develop deep connections with individuals, making great advisors irreplaceable. Every advisor has a wealth of experience and knowledge to draw upon. And an exceptional advisor can do something an app does not: the capacity to surprise with an astute, out of the box solution.

AI extrapolates, assuming that the future is a straight-line extension of the past. But human experiences and aspirations are rarely straight-lined.

The purpose of great financial advice is to help clients achieve outcomes that may currently seem difficult, even impossible, to achieve.

In that spirit, Consilium’s purpose is to champion exceptional financial advice. Our challenge is transforming business processes so that advisors’ time is predominantly spent in front of new and existing clients, playing the pivotal role of educator and behaviour change consultant.

For its part, Consilium is keeping abreast of developments in A1, cyber security and digital concepts for financial planning. Our expertise also embraces practise management, marketing and newer forms of communication such as social media.

But our success depends on our partner firm’s success. In other words, we believe in vested outsourcing, an idea researched and conceived by the University of Tennessee. In vested outsourcing, each party bringing core competencies to attain a result that neither could achieve on its own.

The Peter Drucker version of outsourcing – do what you do best and outsource the rest – is both inspiring and liberating.

Undoubtedly digitisation trends will disrupt financial services. But we also believe that technology can enhance human capabilities, rather than supplant us.

IBM, which has invested heavily in artificial intelligence and its Watson cognitive system, prefers the label augmented intelligence or intelligence augmentation to emphasise the supportive role of technology. Using that train of thought, it is possible to see apps and algorithms as yet another component of the vested outsourcing relationship.

Isaac Asimov once commented that “no sensible decision can be made without taking into account not only the world as it is, but the world as it will be.”

AI is providing personalised information faster and in more streamlined ways than any person could. Information, however, isn’t insight. Advisors utilising both AI as well as their own depth of experience will be best placed to enhance their clients’ financial wellbeing.

For our part, Consilium is excited to be part of the world that combines the best of human endeavour and wisdom with AI’s immense information intelligence. The winners will be our adviser partners and those they serve.

Scott is the managing director of Consillium

Tags: Consilium