By Bill Bachrach via Iris.xyz
New competition in the form of digital or “robo-advisors” has many industry leaders and advisors concerned.
For the most part, machines are currently just digital money managers or TAMPs. As the machines get better and better at increasing their capability, and as user interfaces become friendlier, it’s possible that machines will be able to do sophisticated financial planning and give advice without a human interface.
Naïve advisors discount the machine as a legitimate competitor.
Machines are as dumb right now as they are ever going to be. Their capability is increasing exponentially, not linearly. How many humans do you know who are twice as smart, twice as fast, or twice as effective as they were a year ago? Competition from technology will continue to get stronger, faster. Those advisors who try to hang on to skills that machines can do better will likely not survive.
Technology is much better at the “hard skills” of crunching numbers, aggregating data, automating follow-up, portfolio construction and management, creating reports, etc. The smart human advisors will not compete with the machines.
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