Artificial intelligence enhances human services

Caitlyn Driehorst
October 26th, 2023 at 2:00 AM

I greatly enjoyed attending IndyFest 2023. During the panel titled “Southern Nevada Economic Development: The Path Forward,” reporter Jacob Solis asked panelists to discuss the potential impact of artificial intelligence on Nevada’s economy. Robert Taylor of the Las Vegas Urban Chamber of Commerce joked that he was “Dr. Doom,” adding, “After all, why would I work with a financial adviser if I can open up the Chase app on my phone and find out what to do with my money?”

I disagree with Mr. Taylor. Recent trends show that advances in technology only heighten the value of Nevada’s experience economy — and the value of financial advisers.

AI isn’t the first technology that people thought could replace financial advisers. Robo advisers boomed onto the scene in the 2010s. Historically, an investor may have needed a broker or financial adviser to call in a trade or to manage the onerous processes of rebalancing a portfolio and harvesting tax losses. Suddenly, those chores were commoditized — and 75 percent cheaper than benchmark prices.

But the effect wasn’t that financial advisers became irrelevant. Actually, with their mundane operations now automated, financial advisers who adopted these new technologies became more relevant to their clients, by increasing time devoted to the human aspects of their roles.

As a financial adviser, I don’t see my value to clients as picking the world’s best index fund or executing rebalances like no other. Let the computers own those chores. My value is in interpreting the big picture, debating challenging tradeoffs, teasing out personal values, contextualizing investing results, giving pep talks or talking someone out of the shame that leads them to procrastinate on important tasks. Technology complements — not replaces — the value of these deeply human services.

So what happened after the robo adviser boom in the 2010s? Many went out of business or were acquired by incumbents. Wealthfront’s acquisition by UBS fell apart, and Betterment (which now also serves advisers, including my firm) has yet to have its initial public offering. Meanwhile, according to Cerulli’s U.S. adviser metrics report, from 2016 to 2021, assets managed by U.S. financial advisers grew from $27.5 trillion to $51 trillion.

So what happened after the robo adviser boom in the 2010s? Many went out of business or were acquired by incumbents. Wealthfront’s acquisition by UBS fell apart, and Betterment (which now also serves advisers, including my firm) has yet to have its initial public offering. Meanwhile, according to Cerulli’s U.S. adviser metrics report, from 2016 to 2021, assets managed by U.S. financial advisers grew from $27.5 trillion to $51 trillion.