The wealth management and financial services industries sit at a fascinating technological crossroads.
On one hand, you have a business culture rooted in relationship-based success—it’s a people business. But with that personal touch comes inefficiencies, and while those inefficiencies have always been somewhat manageable, technology has rapidly changed the landscape.
The greatest competitive advantage of humans is our ability to leverage technology.
From the wheel to artificial intelligence, our ability to scale technology and create new baselines of efficiency is what has made humans the world’s most dangerous predator. Technology, since the dawn of humans, has put us atop the food chain. But while the whole "alpha predator" thing is pretty cool, we have also created many of examples of technology that have destroyed us (both literally and figuratively).
Historically, advancements in technology typically came in the form of hardware, where it is much easier to determine if an innovation is friend or foe: Here’s a television/here’s a gun; here’s a machine that helps a factory worker increase efficiency/here’s a machine that makes a factory worker obsolete.
Over the past 25 years these advancements are increasingly in the form of software, where intentions are far more difficult to discern. Fear is magnified when one can’t differentiate their friends from their foes.
The good news is, that’s mostly good news. While new innovations have the capacity to kill some of the human side of the business, most innovations are designed to enhance human performance within wealth management, not replace it.
Humans have one significant advantage over “disruptions” designed to displace advisors—we’re human, and this isn’t Terminator 2. These new innovations shouldn’t be run from, and they certainly shouldn’t be ignored—they should be controlled by human advisors.
The innovation set to target and kill human inefficiencies can be turned into assets for advisors to offer more value to more clients, and at a lower cost. While human advantage over other species is our ability to create and leverage technology, our advantage over technology is our ability to be human. Our ability to balance computational processing with emotional intelligence and behavioral psychology won’t soon be matched.
Artificial intelligence is very good at some things, but it’s not very good at acting human.
Don’t fear technology, even the technology that’s here to destroy you. Embrace it, own it—because it’s not going away and you can control it.
Peter Hans is co-founder and CEO of Harvest Exchange and one of WealthManagement.com's Ten to Watch in 2017.