Advisers' roles will not remain the same and will shift into relationship management as a result of artificial intelligence, according to Ian Partington, chief executive of Third Financial.
Speaking to FT Adviser, Partington discussed how an adviser's role will become a relationship management role while AI will do the analytical side of the job.
He said: “What can an adviser do that an AI bot, which has the sum of all human history and knowledge in its ‘brain’ can't? Do advisers really think they can outperform that? There is absolutely no way at all.”
Partington said instead an adviser's role will become more about relationship management.
“For the more analytical side it will be AI that does the job because it can do it so much faster and better than a human.
“Advisers will have a wealth of information at their fingertips that will be delivered via AI which will listen to the advisers' conversations and prompt them with what to say. People are still going to value human interaction but not for the facts, such as which portfolio model they should be in,” he added.
Partington said the younger generation of clients will be more accepting of this change because they are more technologically adept.
He said: “There isn’t going to be the same role for the adviser, technology is moving at a ridiculous pace so everything will evolve and advisers will have to adapt to that.”
Hybrid approach to advice
Partington did not think large cohorts of young people who will be coming into wealth in the coming years will seek advice because they have become “self serving”.
He explained: “There is a vast amount of information available now meaning people can self serve. They can google what they should be investing in so I don’t think the market for financial advice is as strong as it used to be because of this.
“However, this is an opportunity for companies to provide that self-service functionality, and to provide people with all the tools so that they can self-serve.”
Partington believed the younger generation may favour what he called a “hybrid approach” when it came to seeking financial advice.
He said: “If you are seeking out an adviser it’s because you want advice about something, you don't necessarily want to pay that person for the next five or 10 years because they gave you some advice one day in the past, so the billing model will need to change as well.
“The advice has also got to be fit for purpose and that is where a hybrid approach comes in and technology will be key.”
Partington discussed how technology providers will be able to provide a customised approach at the point of contact with a client, but do it on a mass scale.
“There are huge opportunities for firms to take on lots of business and they will need to as well because they won't be charging as much for each individual client, unless they're actually continually adding value to that client's finances. That’s the hybrid approach,” he added.
