Your financial advisor is inhuman

Posted 11 September, 2016 by Surely
in Technical Smechnical

A new class of financial adviser is emerging.
They are able to analyze your risk appetite with cold-blooded precision.
Your preferred investment portfolio will be executed almost instantaneously.

There is absolutely no human error.
Every cent will be accounted for and rightly placed where it should be.
After all, a Robo-advisor is not actually a person.

Your next financial adviser may just be a machine.
Is that really the future?
Or is it a false dawn?


It must be a human error - A robot can do no wrong!

It must be a human error – A robot can do no wrong!



What is a Robo-Advisor?  


Robo-advisors are portfolio management software that will automate the process of investing.
You may just sign up via their app or website.
The Robo-advisor may analyze your risk appetite and you may choose which recommendation to take up.

After placing your money, you can then leave it there for it to manage.
It will do portfolio rebalancing based by employing a few sets of algorithms.
Empirically, it is doing what a traditional fund manager does.


A Robo-advisor would not steal your cookie.

A Robo-advisor would not steal your cookie.



The best part is that you just have to fire up their app on your phone and you may view how your investments are doing.
Not happy with the returns?
You can change your make-up of your funds immediately and the Robo-advisor will make the changes for you.

Oh yes, it does the job at a lower cost to you than a human one.
With lower management fee, you should be able to make more out of your hard-earned money.


The misleading name


As it stands, Robo-advisors are really just fund managers.
The advisory portion is severely lacking.

Although, there are some that have some financial tools to assist with that, Robo-advisors by and large deals almost exclusively in investment management.
Therefore, you may not be able to have a holistic view of your financial situation.


And you would be able to have such a view.

And you would not have the opportunity to meet suave dudes


The hyped-up but misnaming of Robo-advisor is probably intended to make you feel like you may dispense away with a financial advisor.
Technically, it should be called Robo-fund-manager.
But that definitely does not sound too impressive, isn’t it?


Could a robot become an adequate insurance advisor?


Robots are rapidly taking over certain functions.
More than just fund managing, there is development in the legal industry.

A robot named ROSS has been touted  as “the world’s first artificially intelligent attorney.”
BakerHostetler, a law firm in the USA, has employed ROSS to assist with legal research.
It would search for the relevant legal research work that is now handled by junior lawyers.

Could insurance be next bastion that technology can conquer?
Let’s take a hard look at it.


Can droids pass the test ?

Can droids pass the test ?


The first role of a financial advisor is to analyze the client’s protection needs and then, provide solutions via insurance.
To assess what area that the client needs protection, we believe that it is an area that may be automated.

By inputting the income, dependents, and other financial information, an intelligent algorithm should be able to tell you exactly what you should focus on.
After all, what you need for your protection is pretty standard.
You may find some tools that serve this purpose on existing websites.

However, most of them are rudimentary.
Simple mathematic formulas that tell you that you should buy a certain amount with no reasons or analysis.
You do not know why you need that protection and how to prioritize them.
More important, these formulas are not going to able to tell if a special dependent needs more help than usual.

That is why you need someone to analyze it.
Someone who can provide a reasonable solution without your budget.
That is an area that robots have yet to be able to replicate.

Just like ROSS who relieve lawyers of mundane paperwork, a robot can help with financial advisory.
However, it has a limited role for now.
Until artificial intelligence is advanced enough and economical enough for the masses, a right human brain may still be the solution.


Working Hand in Hand


As technology improves day by day, the expectations of a financial adviser will be elevated.
If a robot is able to analyze the needs of the client, the adviser must provide better value to the customers in terms of optimizing insurance solutions and a warm human touch.


We believe a human touch is worth much more than efficiency.

We believe a human touch is worth more than efficiency of a robot.


At the same time, financial advisers should embrace technology as it may help them to save time in certain areas and focus on the clients more.
They should not view it as an adversary but as another tool to assist them.
In that way, they will never be obsolete but will move on with the times to be a more efficient and better financial advisers.




Never say never.
It may be unimaginable now but it may be possible that a robot may be able to do the full spectrum of a financial adviser’s role.
After all, driver-less cars are unfathomable just 20 years back.


The future of today often does not become tomorrow.

The future of today often does not become tomorrow.


The day may come when the intelligence of men is not enough.
When robots replace us and break some of the job bowls.
But it is not this day. aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.


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