Could this be the end for advisers?

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Personal financial advisers have a 58% chance of being replaced by a mobile robot or a “smart” computer, according to a major Oxford University study.

The study, which investigated how new  technology could affect the United States job market, revealed that almost half of the work force – from taxi drivers to lawyers – is at risk of automation, Bloomberg reported.

This is mainly due to the emergence of tools that use intelligently wired mobile robots and complicated algorithms that “learn” from past examples.

Carl Benedikt Frey, co-author of the study, said it will be possible to automate occupations employing almost half of the US workforce over the next two decades.  

Appropriately, he and his colleague themselves applied a computerised algorithm to estimate the impact that atomisation could have on 632 US occupations. The computer then spat out the percentage of probability that each human job could be replaced with a machine.

The study revealed that loan officers had the highest chance (98%) of being automated in the near future, while financial advisers sat at a more-than-half with a 58% chance.

School teachers, physicians and surgeons had the lowest chance of being replaced at 0.4%.

“It’s a race between technology and education,” said Frey.


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  • Only the FP industry on 26/03/2014 7:03:44 PM

    Will never happen but there will be a massive number of people going the DIY route for sure. Advisers need to understand two things. FP charges are too high & people will be scrutinising your services & charges like never before. Charge thousands a year for your advice, not matter how good it is and they will walk & seek a DIY option.

  • Wondering out loud on 25/03/2014 12:40:41 PM

    Not worried abut the changes as they will come and we will need to adapt. However it raises some interesting issues about fees, commissions, best interest duties, conflicts etc that when you consider what can be programmed and the 'little nuances' or 'bugs' that can be programmed into software. That should give ASIC something to think about as they seem ill-equipped to deal with humans now beating the system, imagine the fun they will have with programmes that could be running from any country in the world, with no interest or concern about being compliant. How will they monitor and administer that to ensure FOFA and all the red tape is being followed.

  • Elio Centofanti on 25/03/2014 12:24:32 PM

    It will take time but I agree with the article. As the next generations become more disconnected from genuine human interaction, (facebook, twitter, instagram etc) they will see less need to deal face to face and in fact, will find it difficult to deal face to face with people. They will prefer the relative security provided by distance and being on the other side of a screen. Eventually I do see people being able to plug in their own parameters and goals and receiveing a series of options to implement. As systems become more intuitive solutions will be more tailored. A loose connection but look at the evolution of gaming, from the old tennis game to now. If you think things won't change, you're dreaming.

  • Andrew Newman on 25/03/2014 11:34:55 AM

    We may as well replace the entire human race with robots! Seriously though, the fee for service financial advice I provide is very tailored and is based on goals that are very different for each person - no robot can replicate that.

  • Pat on 25/03/2014 11:12:28 AM

    A lot of defensiveness here thinking that we are indespensible. The reality is, at a very basic level, much of what we do for the average person can be automated - to pay off mortgage by 20XX, increase frequency and repayments accordinly; to fund retirement at age YY, increase regular contributions by $100 per month; punch in details of liabilities, both current and future, living expenses, etc. and generate a base insurance calculation.

    Provide access to low cost, index based super funds with asset allocations based on risk profile (after using something like Finametrica) - no need for the wank that is trying to pick active fund managers - provide access to well researched insurers. Provide access to information and education on the effect of selling in down markets and buying after big upswings.

    All of this can, conceivably, be done on a platform that can allow the person to keep track of their situation, provide prompts when they need to do something, provide warnings that they shouldn't be doing something and the job is sufficiently done.

    This will help all those people who aren't seeing a planner now (which is something like 80% of the adult population) to start doing something. Better than seeing a conflicted intra-fund adviser.

    We can then focus on the smaller part of the population who actually need real advice.

  • Brian on 25/03/2014 10:32:59 AM

    A computer is a tool, like a pen or a calculator only far more complex and sophisticated. Technology is a vehicle by which skilled advisers can deliver advice and recommendations to clients. The contemporary myth that technology can replace personal interaction has been repeatedly debunked but keeps raising its ugly head.

  • James Howarth on 25/03/2014 10:14:09 AM

    Yes probably should be considering asics attempts to destroy the current generation of advisers with , regulating everything.

    If advice can be regulated it can also be delivered by these machines.

    ASIC thinks it can be done.

  • SS on 25/03/2014 10:12:34 AM

    Just checked my calendar- I was sure it must have been April 1st- but that's not until next week. This "study" is a perfect example of the limitations of machines, whether they be the computers of the future or the bank planner sales drones of yesterday. Relationship-based planners have nothing to worry about.

  • Melinda Houghton on 25/03/2014 9:44:39 AM

    Hmm, reading body language, coaching, guiding, overcoming objections, educating, tough love, and many other functions that we do. More like teachers than loan brokers I think.

  • Rod magill on 25/03/2014 9:37:17 AM

    Ha ha ha what a joke, bit like when Video machines were introduced all the movie theatres were going to close down , now we have more than ever, and when computers were going to replace us all and their would be no more paper , what a joke, as long as human beings have different senses , seeing speaking hearing we will want to communicate with a human being

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