Not a day almost without an announcement about the launch of a new robo-advisor or a bot service that promises to revolutionise (and conquer) the asset / wealth management industry, by providing low cost and tailored financial advice to all, from mass-affluent to UHNW clients.
Many Relationship Managers are still assessing how much of a threat this could be to their job. Some think that robo-advisors are failing to scale client acquisition at reasonable costs for their business model and therefore it is only a matter of time before they run out of VC money and crash…
Others are considering the latest developments in this space, such as Werthstein, offering all portfolio management services for free, but clients pay for investment content or Scalable Capital, promoting an AI solution that does not require clients to enter large set of data by hand, and they are coming to the conclusion that robo-advisers will eventually replace human advisors.
It is probably too early to tell who is right, but as I work with Relationship Managers myself, I want to be ready to embrace the change and continue deliver value, so my role remains critical in the future. The following video and article have helped me frame a strategy that I believe can deliver on this objective and support Relationship Managers in carving out a role in the value chain of our FinTech future.
Jobs of the future will be what robots can’t do
Dr. Michio Kaku is a theoretical physicist, bestselling author, acclaimed public speaker, renowned futurist, and populariser of science, who teaches at the City College of New York and CUNY Graduate Center.
In this video published by Big Think (The jobs of the future will be what robots can’t do), Dr. Kaku explains how automation will sweep the job board, but that there are tasks that only humans can perform.
Indeed, he claims that there are huge gaps in what robots can do:
- robots have bad eyesight and can see shapes but don’t understand these make objects like faces, chairs or cups,
- robots also lack common sense: they don’t know that a string can pull but not push.
From these, he derives the two types of jobs humans will keep doing in the future are:
- not repetitive jobs for blue collars: i.e. jobs that cannot be automated,
- jobs that engage in “Intellectual Capitalism” for white collars: i.e. any activity involving creativity, imagination, leadership and/or analysis.
Empathy: The Essential Skill To Survive The Robo-Planner Threat
Michael Kitces is a Partner and the Director of Research for Pinnacle Advisory Group, a private wealth management firm with USD1.4bn AuM. He writes about financial planning strategies and practice management ideas.
In his article (Empathy: the essential skill to survive the robo-planner threat) Michael discusses the fundamental reason why Relationship Managers can’t be replaced by computers.
He identifies that in real life, clients’ financial goals are constantly changing and not necessarily in a rational way. This often results in an unsolvable problem for a computer as there is no clear question to answer in the first place. In such an environment, he claims that the value relationship managers bring is the ability to discern what clients are thinking and feeling and to respond in an appropriate way. He calls this “Financial Advisor Empathy”.
His view is that Relationship Managers will continue to exist because through empathy, they can connect with clients, and help them assess changing goals and assist in changing behaviours to actually achieve them. This is a task a computer can’t replace ever.
The 3 steps to keep a job in the FinTech revolution that is coming
As emails and computers have in the past replaced personal assistants with typewriters and telephones, robo-advisors and artificial intelligence bots will most likely become a significant part of the future financial advice value chain. Relationship Managers who do want to maintain their role in this value chain need to take action now:
- Work on your skills continuously
Knowledge and competency acquisition used to take place before entering the workforce. Accelerating technological development is making this a continuous requirement to avoid obsolescence in the workplace.
Don’t wait until you are told… make a habit of developing new skills on a continuous basis.
- Keep your technical skills fresh, but most importantly work on your soft skills
Empathy, creativity, connectivity resonate are the most important soft skills as they will allow you to elicit client needs, to imagine new business models, and create links between people and ideas to make those ideas work and fulfil clients’ desires.
Aim for the skills computers can’t replace.
- Work with FinTech, rather than against
Our environment has become too complex, too fast to rely on human brain, experience and gut feel. Embracing FinTech (big data analysis and multi-channels connectivity) will advantageously replace the old ways and will ensure you remain in the game.
Resisting will only lead to irratrapable gaps.
With FinTech, the second automation of the financial industry has started. To survive and enjoy this journey, continuously developing the right skill set is key for Relationship Managers and will determine who gets to stay until the end. Don’t be left behind!
More views about FinTech:
- Digitalisation in the Asset and Fund Management industry: opportunity or necessary evil?
- Why FinTech Start-ups will not win if they play like the banks…