In her latest blog for IFA Magazine, Katie Brinsden (pictured), Managing Director at the national, directly- authorised IFA, Truly Independent, has her sights firmly set on the use of technology within advice businesses. With some advisers still nervous about embracing the future power of technology, Katie tells us why she believes that it can have one of two impacts – and that’s being overpowered and empowered.
Some years ago, when I worked in the motor trade, the idea of a self-driving car was the stuff of science-fiction. The notion of surrendering control to a machine was essentially embodied in an automatic gearbox and a couple of bumper-mounted parking sensors.
How times have changed. Autonomous vehicles will soon be road-legal, and even now many of us own cars that know when to speed up, when to slow down, how to avoid collisions and how to squeeze into a tight space within strolling distance of a supermarket.
This remarkable progress should give us comfort. After all, cutting-edge automotive technology is designed to help us make better decisions and keep us safe. Yet many people find their early encounters with a state-of-the-art, tech-enabled model highly unsettling.
Doubters maintain a white-knuckle grip on the steering wheel, as if primed to prevent it from suddenly yanking them to their doom. Their left foot stays anxiously poised above the brake pedal, ready to avert imminent disaster. They rail against lane-change warnings and other gizmos deemed guilty of “nannying”.
Are some of us guilty of a similar charge?
It occurs to me that many advisers regard the ongoing rise of technology in our industry with the same mix of cynicism and dread. They are convinced that here, too, the road ahead is at best uncertain and at worst downright dangerous.
In my view, such a perspective flies in the face of rationality. With tech inevitably set to increasingly shape this sphere, advisers must recognise how this trend should ultimately grant them more control rather than less.
Algorithms versus engagement
Most of the fears surrounding tech stem from a belief that advisers will eventually be left with nothing to do. AI in particular is so advanced, the argument goes, that the only option is to step aside and limply wave through its victory march.
Yet this mindset is rooted in two closely related misconceptions. The first is that tech has an edge in every conceivable endeavour, and the second is that “traditional” financial advice – as delivered by one person to another – can be matched and even supplanted.
Neither is true. Ever since the earliest research into whether machines are legitimately capable of thought, it has been widely acknowledged that computers excel at some tasks and human beings excel at others.
It is right to concede, for example, that the likes of ChatGPT possess an extraordinary capacity for processing and organising information. But does that mean they can provide entirely competent, solid, dependable financial advice?
Hardly. To quote data scientist Cathy O’Neil: “Algorithms are opinions embedded in code.” Being able to draw on nearly every trace of knowledge ever accumulated is a dubious skill when much of that “wisdom” may never have been completely reliable in the first place.
Even today, with one breakthrough following hot on the heels of another, nothing can genuinely recreate – less still replace – an adviser’s ability to adjust recommendations to take account of hard facts, soft facts and emotions. Engaging with and understanding our fellow Homo sapiens is one area in which we hold a crystal-clear advantage.
Maximising respective strengths
Logically, if machines are superior in some respects and advisers are superior in others, it makes sense to maximise the respective strengths of both camps. So how might we strike a perfect balance that benefits not just the adviser community but the clients it aims to serve?
The answer lies in grasping the difference between being overpowered and being empowered. Those advisers who see technology as a mortal enemy can expect the former, while those who see it as an ally – a “virtual assistant”, as ChatGPT is often referred to – can expect the latter.
When all is said and done, this is really a question of choosing the right business approach. Advisers should have no hesitation in using the latest tech if it makes their lives conspicuously easier – say, by sparing them countless hours of data analysis or other forms of “heavy lifting”.
Equally, tech should be a go-to if it adds value for stakeholders. At Truly Independent, for example, we find the needs of more than half of our clients can be met with a light-touch, self-monitoring, tech-centric advice package instead of a fully personalised, more costly option.
The necessary transition will not be easy for everyone, of course. Total acceptance is likely to come only when we fully appreciate this new way of doing things works as intended, warrants our trust and offers scope to dramatically enhance almost everything we do.
Again, the similarities with self-driving cars are striking. The journey may be unfamiliar – even daunting – but in the end, if we sit back and enjoy the ride, it should lead to a future in which innovation underpins more efficient practices and, crucially, better outcomes.
Katie Brinsden is Managing Director of Truly Independent.
