But the truth is, when AI and human expertise are thoughtfully combined, the result can be enhanced data analytics, improved risk management and faster decision-making. The resulting efficiencies will provide more opportunities for planners to build relationships with their clients.
We know that financial technologies, including those powered by AI, will proliferate. An Accenture study found that the vast majority of millennials and members of gen Z trust algorithm-generated advice over that provided by human advisors.
It’s not surprising that those who grew up with the internet are comfortable embracing financial technology. Digital natives have come to expect the convenience and personalization it provides. Of course, that doesn’t mean that young people — or any group of consumers — want to receive advice from technology alone. Tellingly, the same Accenture study found that 83% of those surveyed prefer a blended human and digital advisor experience.
That means planners must continue to leverage technology to help more Canadians achieve financial well-being while also providing them with the human touch they’re demanding.
At FP Canada, our Fintellect initiative, in partnership with the Institute of Financial Planning, is looking into how the profession can best leverage new technologies in concert with that human component that is such an integral part of the client relationship.
Given the inevitability of tech’s continued encroachment on financial planning, it only makes sense to do so.
Professional financial planners can do what AI can’t, offering much more than can be accomplished by technology alone. They see the bigger picture and serve as a living, breathing partner in a consumer’s journey to lifelong financial well-being.
Planners understand factors like family relationships and interpersonal conflicts and how they can impact financial decisions. The most skilled professionals have a good understanding of why people make the choices they do about money. The result is a deeper layer of insight that allows them to go beyond surface-level analysis and provide truly personalized guidance to their clients.
When it comes to tailoring advice, financial planning professionals can also draw out helpful information that their clients may not have known was relevant, including family dynamics and retirement aspirations. This type of discussion allows for a more holistic view of an individual’s financial circumstances, and can only happen in a relationship built on trust.
This trust allows financial planners to help their clients consider the interpersonal relationships and life circumstances that are so often intertwined with conversations about personal finances. Technology cannot take such unique and personal factors into consideration.
So, what should planners do to continue to build on this all-important trust with consumers?
First off, building a rapport through one-on-one interaction is critical. From listening actively to showing empathy, planners can deepen trust with clients by discussing financial circumstances in depth and in a manner that’s relevant to their unique goals.
Trust is also enhanced when consumers know that the financial planner they choose to work with is required to abide by the highest standards of professional responsibility, including an ethical obligation to act in the client’s best interest. Planners can instil confidence in their clients by highlighting the code of ethics they must abide by, as well as the complaint process they would be subjected to if they failed to live up to their obligations.
Education is another important piece of the puzzle when it comes to building trust. It’s important for the profession to focus on teaching aspiring planners the relationship skills they need to be client-ready.
At FP Canada, this is a major focus. To name just one example, our new professional educational program for qualified associate financial planners (QAFPs), provided by the FP Canada Institute, has been enhanced to provide hands-on opportunities for aspiring planners to practise communication and client engagement and to fully understand the client discovery process.
In addition to building a foundation of trust and honing relationship-building skills, it’s critical for the financial planning profession to use new and emerging technologies to their clients’ advantage.
Aggregate data and digital onboarding, for example, can improve efficiency and increase capacity for financial planners. By completing certain types of analysis, AI and other technologies can free up time for them to work directly with their clients.
There’s no denying that technologies like AI are beginning to shape the financial services sector in this evolving landscape. While perceived as a threat by some, they also represent a significant opportunity for the financial planning profession. Embracing innovation gives financial planners more time and capacity to focus on building meaningful, trusted and lasting relationships with their clients.
This change represents a win not only for the profession but also for the Canadians who benefit from professional financial planning.
Tashia Batstone is president and CEO of FP Canada.