For best-in-class artificial intelligence solutions to actually earn that designation, Sindhu Joseph warns that the tools can't be used as "set it and forget it."
Joseph, the
In spring 2016, the AI chatbot, named as an acronym for "thinking about you,"
Just "letting the machine run" without proper human guidance or care is a huge pitfall, said Joseph, who holds a PhD in artificial intelligence and is the
"There's a lot of applications where that works really well. Even in very specific applications of, let's say, robo advising, if you are looking at which tech stock I need to buy … for those kinds of things you can look at patterns," she said. "But if you ask the robo advisor, 'what should I invest in' or 'how I should plan financially,' that is not a question that a robo-advisor can answer based on your (specific) circumstances.
"But if you build the AI correctly, it can be used as a supporting tool creating efficiencies on multiple levels."
At
Moderated by Axios reporter Ryan Lawler, the panel was a reminder that the most powerful part of any AI solution is the people who wield it.
About 83% of advisors interviewed by consulting firm Accenture said they believe AI will have a direct, measurable and consistent impact on the client-advisor relationship within the next 18 months. That same percentage of advisors also said they believe that AI can achieve a level of sophisticated advice and planning that will ultimately leave them competing with an algorithm for clients within the next 18 months.
But Altfest thinks human experience can stand up to the algorithm now and well into the future. So instead of preparing to wage war with machines, advisors need to figure out the right way to embrace their powerful, still developing ally.
"Humans are not going anywhere, and we're just going to become much more valuable to our clients," he said. "I think that's because we're really good at using our judgment. We're good at creativity. We're good at the personal side of things. And I don't see machines replacing any of those things any time soon."
Altfest underscored the need for a symbiotic relationship between humans and technology for the modern advisor to be successful. Simply put, advisors cannot juggle all of their responsibilities to a client without a little help.
He gave the example of working with a client who was diagnosed with early-onset Alzheimer's and the tumult it introduced into his life.
"He has to figure out who's going to pay the bills. Who's going to handle the medical care. What his estate plan needs to look like. How to pay for long term care expenses. What the tax reduction opportunities are," Altfest said.
"On the other side, you have the young professional just getting started with a portfolio who wants sustainable investments, wants to find tax reduction opportunities and wants to manage the risk in their lives," he added. "How do you serve all those needs at once? We can't do that on our own without technology."
The good news, Altfest said, is that solid data can leverage AI properly.
"The financial services industry has done a great job of digitizing information in our different platforms, and now it is the role of AI and technology to turn that into action, and for us as advisors to exercise judgment over it," he said. "Figure out how to apply it. Figure out where there are limitations to the recommendations. And use our creativity to do better."
Joseph thinks that AI is going to be the new user experience in terms of creating next-level client care.
But it will be up to advisors to offer that interaction in a way that works.
"We call it the ease of conversation meeting the power of automation," Joseph said, adding that unless wealth managers create a seamless experience that keeps them at the forefront, even the most sophisticated technology will fall short of its intended goal.
She added that the "holy grail" of AI is the ability to understand human intent in its contextual sense.
"That's when AI has really achieved something," she said. "If you understand the intent, you can have multiple elves of automation built into it to create scale and efficiency. But the understanding and intent part is the most difficult. And that is where AI should play the most important role."
Future Proof, organized by Advisor Circle and Ritholtz Wealth Management, attracted more than 2,200 people to Huntington Beach, California for an event billed as the first "wealth management festival." Officials said the guest list includes more than 1,000 financial advisors, 220 speakers and nearly 100 sponsors. Financial Planning is a sponsor of the event.
