From companies like
But as the eye-catching stories pile up, AI's potential impact on the financial advice industry looms heavy. One of the challenges, according to
That's why when attempting to break down what it means to be more human and provide human-first advice in an AI era, advisors should start by asking the right questions.
"Things are moving too quickly. We don't know. You don't know. ChatGPT-4 replaced Chat GPT-3.5 … I mean, this is happening in the space of weeks, not years," said Portnoy, the founder of Chicago-based behavioral finance consultancy
Last week, Portnoy and
Introduced by Alyssa Seidl, a strategic sales manager on the
"You know, with AI becoming so popular in today's world, it provides a really unique opportunity to outsource routine tasks in order to drive more productivity," Seidl said. "But also, it's important to remember the significance of keeping the human element and using that human interaction in your business to continue to deepen client relationships and differentiate yourself."
Diving into the topic, Portnoy presented Egan with what he called a "middle of the fairway" question: How will artificial intelligence impact the market for financial advice?
"The more extreme question. The more dramatic, movie-based, Skynet element to it is, will the next wave of robots replace humans in the provision of financial advice?" Portnoy asked. "If we're talking about the impact on the market for financial advice and how AI cuts through, markets have a supply side and a demand side. On the demand side, who are the customers for financial advice? Who's going to want something called financial advice in the age of artificial intelligence?
Egan, who has a background of using behavioral finance to help people understand how they can make better investment decisions, said his "middle of the fairway answer" is that AI won't put advisors out of work. But it will change the work that advisors do and what they spend the hours of their life doing.
"It's the standard technology answer," Egan said. "You don't want to compete with (a) technology that is very inexpensive and deployable and scalable and they can get access to it at 11:30 on a Saturday nigh. On the other hand, there's a lot of the core components of good financial advice leading to good outcomes that it will not be able to do."
Human accountability — both in terms of the advice being provided and the commitment to follow through on a chosen plan — is a core component of working with a planner that Egan believes will remain out of AI's reach.
"Also, if I have a connection with you, that is going to make me better able to take into account you as an individual. Not just you, but your family, your circumstances, et cetera, to more fluidly and seamlessly deliver the advice in a way that's relevant to you is going to continue to stand up," Egan said.
As ChatGPT and generative AI came back into the conversation, Portnoy played a bit of devil's advocate. He described to Egan a future in which a well enabled GPT-5 or GPT-6 tool may be able to play a smart, empathetic role in a client's life in just the same way humans advisors have for decades.
Egan said that on a human level, he and many others are not concerned with what an AI tool "thinks" of him. For example, there is no worry of causing inconvenience if you're late for a meeting with your AI advisor, nor any fear of what may happen if its advice is completely ignored.
"The other element is that, and I think this is really tough, when we interact with people we are multichannel processes that look at how they look. What's the timbre of their voice? What mood is the person in?" Egan said. "The first thing that my personal trainer asks me when I show up each morning is like, 'hey man, how are you feeling?' How much juice do you have right now? And I think that until we can have something that kind of has that fullness or ability … we're not going to have the same immersive sense of how we should interact with it."
Egan added that to make a real connection, we have to spend time wrestling with what actually matters to us.
"It's a conversation you struggle through with somebody else who knows how to ask questions that are relevant," Egan said. "It pushes some of the non-human work, in a good way, onto a computer and lets us spend more time having human conversations about what matters."
Portnoy said at Shaping Wealth, one of the perspectives his team keeps front and center is how much the modern advisor has evolved over the past 50 years.
So further evolution should be expected, and embraced.
"We've gone on this long arc from transactional to relational business. It has become more of a relationship business and a more human-centric business. And I think it's increasingly understood, albeit from a small base, that the modern advisor is helping her clients move along life's journey," Portnoy said. "And there's two dimensions to that. One is as mechanic, and the other is as guide."
He said on the mechanical side lies all of the technical dimensions to financial planning. The investments, the insurance, the estates, the taxes, the complexities.
"All of it is more or less available in spreadsheets and legal documents. And it is akin to building an engine inside a vehicle that runs perfectly," Portnoy said. "But even if you have an engine that runs perfectly, there's a second question which is, are we driving in the right direction? And that brings on a second role of the modern advisor, which is to serve as guide. To ask the questions about goals. To ask the questions about purpose and meaning."
Artificial intelligence has regularly topped the list when advisors weigh in the kind of technologies they believe will have a major positive impact on the way they do business.
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.
Earlier this year, Broadridge's
