Man vs. Machine
I have a crystal clear memory of a warning someone gave me about our industry over 20 years ago. I was walking out of my office outside of Atlanta, and a coworker turned to me and said, “Enjoy this work while you can. We’re all being replaced by kiosks!”
You see, this was the early 2000’s, and online trading had really caught on. Anyone with an internet connection and a decent computer (nobody was really carrying smartphones yet) could go on to one of a couple of online brokerage firms and buy and sell stocks for just a few dollars per trade. Many brokers had seen what ATMs had done to most bank tellers and were quite nervous.
Not to spoil the ending, but it's twenty years later, and I’m still here. What went wrong with that dire prediction?
Over and over, the media, the investing public, and even our own industry have misunderstood the value that people gain from working with a true professional. There was a time when the ability to trade was rare. A seat on the stock exchange was expensive and hard to obtain. Only a select few were licensed to execute trades on the exchanges, and you needed to work with one of them (and compensate them) if you wanted to participate in the investment markets…then online trading was invented. Suddenly, access was no longer a value worth paying for. The industry had to pivot. Your broker had to bring you information to prove their worth. Their companies had teams of economists and researchers who could tell you the best things to buy and sell to get the outcomes you wanted. That is, until, once again, the internet rained on their parade. The same do-it-yourselfers who embraced online trading could find, for free or at relatively low cost, all of the research they could possibly consume from an array of online resources. Why would they pay “some suit” for insights that they could get themselves?
The industry could no longer sell access. They no longer held the monopoly on investment research. Manhattan skyscrapers don’t come cheap…so they had to invent some other way to show that their armies of brokers were worth the price of their Brooks Brothers. Or did they?
Some firms essentially threw in the towel in their battle against obsolescence against the foe that was technology. Terms like “Robo Advisor” started to become ubiquitous. The financial services industry had invented the terminator, and mankind was doomed. Well, much like in many of the greatest sci-fi films, it is never good to bet against humanity.
I am writing this today because I recently came across a story that caught my attention. One of the largest firms in our industry is shutting down a “hybrid robo-advisor” service. It was supposed to combine technology with access to human financial planners. On paper, it looked like the future. In practice...well, they’re pulling the plug.
Technology is great at executing instructions, but you can’t have personal finance without a person.
At our best, our work does not start with a portfolio. It starts with a conversation. The foundations of the process are questions, clarifications, personal principles, and meaning. These foundations lead to decisions.
The most important decisions in our lives are often made under conditions that are less-than-ideal for optimal decision-making. People don’t exist in a vacuum. Priorities shift. Fear and greed bubble up at the least convenient times. These make decisions difficult, and no algorithm can truly understand. A few lines of computer code will not sit with you and remind you to slow down. It won’t keep you from getting despondent when things look bad or irrationally exuberant when things look good. This is unfortunate, since the best decisions are made somewhere in the middle.
As the work continues to get more automated, we chose to lean into something that simply cannot be soldered into a silicon chip. We embrace judgment, perspective, and human connection.
In the interest of full disclosure, artificial intelligence is the reason why this essay isn’t chock full of typos and questionable punctuation. The machines have their place.
More importantly, we continue to invest in people, training, and thoughtful planning conversations. It’s why we spend more time up front and avoid trying to be everything to everyone.
In a louder, faster, more automated financial world, our goal is simple:
To help you make better decisions calmly, deliberately, and with a caring human in your corner.