This newsletter issue is mostly about technology and new fintech solutions, which is something I’ve followed for (believe it or not) roughly 41 years. I go back so far that I wrote about the very first financial planning software programs: Financial Profiles, Leonard Systems, IFDS, PLANMAN, etc. I wrote the very first tech survey when Barry Vinocur, then editor of Investment Advisor magazine, discovered that I was keeping a running spreadsheet of the various tech solutions in the 1990s—because so many people were asking me about this or that program. I think back then the article included just a couple dozen or so options; I’m pretty sure that none of them are still around today.
And believe it or not, people were talking seriously about the threat of AI-powered planning and automated financial plans way back in those early days.
Of course, I also remember the robos when they were first introduced. And that experience triggered some pattern recognition in my brain. Those very first software programs generated a wave of actual despair across the profession; advisors were imagining that computers, with planning software, were going to replace them and their value proposition.
Then, through the 1980s, tech adoption was cautious; I repeatedly heard advisors tell me that they had ‘more control’ over their spreadsheets than the ‘black box’ that was planning software, and people disdained advisor-specific CRM in favor of more generic (sales) databases like ACT and Goldmine. Real advisors didn’t need that fancy stuff.
The reaction to the online portfolio management solutions (aka the “robos”) generated the same kind of existential chill down the spine that the newfangled software thing did back in the day; people were once again fearful that a computer would replace them.
The point of all this is that I observed a very different dynamic at T3 around the new AI program ChatGPT. Here was a program that you could talk to and it would talk back. Ask it questions and it would answer with, I have to say, more coherence and logic than I get from some of my relatives. It has passed the bar in California and performed well enough on medical examinations that it would be licensed to practice medicine if it were made of flesh instead of silicon.
Real AI. Surely this was a genuinely terrifying new competitor to financial planners—right?
No; this time around, the response from the profession seems to be curiosity instead of despair. When the robos came out, I wrote a number of articles reassuring everybody that their value proposition was secure, that this was a tool to be leveraged (primarily for managing small accounts) rather than something to be feared. I do not anticipate having to write those articles about ChatGPT.
Not only that, but, as you saw in the lead article to this issue, the fintech world is already exploring how to incorporate AI into their value propositions, and showing advisors how to generate first drafts of client messages in real time. No more staring at a blank sheet of paper; the skill of the future will be editing and personalizing. No more holding new technology at arm’s length for five or ten years. No more fear of being supplanted by something that lives in the circuitry.
This, to me, is a heartening, encouraging development, a sign of maturity. Advisors have reached the point where they know where their value lies, and they know how to move up the value chain if any part of their service were to suffer silicon encroachment.
I’m looking forward to seeing how the profession leverages AI in a variety of ways that none of us have thought of yet, continuing a very long professional partnership with our computers.