Change is Coming for Financial Advisers

It seems that artificial intelligence is useful for more than just Pokémon Go. According to Jason Zweig’s recent blog in The Wall Street Journal, financial advisers are increasingly using the technology to better serve the needs of their clients.

While advisers can understand a client’s situation by gauging their mood and asking questions concerning goals, dreams and risk tolerance, a computer can amass and dissect huge amounts of data to predict behavior. For example, Zweig writes, “it can trawl through your actions—saving, borrowing, spending, prepaying a mortgage, buying a car, trading stocks and so on—to see how they correlated to economic conditions, news headlines or changes in your family situation.” Then, he adds, the computer can make predictions about clients’ future behaviors.

Maybe that’s why Zweig’s blog is titled, “It’s Not Creepy, It’s the Future.” What may feel like Big Brother watching is actually intended to improve service to clients, says Brian Walter, head of the wealth-management initiative at IBM’s Watson Group in New York. He says the technology is being used by a “steadily growing number” of financial planning firms. Adam Nash, chief executive of Wealthfront, an online investment adviser, argues, “It’s one thing for me to ask you what you think your savings rate is, and another to look at your bank account and tell you what it is and what causes it to change over time.”

Zweig asserts that artificial intelligence should allow advisers to spend more time “at what they excel at—understanding the personal aspects of their clients’ financial lives and building a bond of trust.”