an article by Maurizio Primanni, CEO of Gruppo Excellence, for the monthly Advisor
The theme of the digital financial advisor makes a strong comeback in the advisory debate following the recent applications of artificial intelligence. In Italy everything started with the – momentary – stop of the Privacy Authority to ChatGPT, the software based on AI and machine learning developed by OpenAI. Overseas, there was a strike by Hollywood screenwriters, who fear being ousted by AI. Even an innovation guru like Elon Musk has expressed concern. Geoffrey Hinton, considered the godfather of AI, has resigned from Google warning about its dangers and critical issues. The EU Parliament has given its first yes to the rules for the use of AI, which provide for the red dot for unacceptable applications. The UK and the USA are outlining their regulations for use. This was also discussed at the G7 meeting in Hiroshima. The impression is that we will move towards a regulation of the matter based on the anthropocentric and ethical development of AI, a solution that I personally agree with.
THE CONSULTANT AT THE CENTER, MADE MORE EFFECTIVE BY AI IN SERVING THE CUSTOMER
All this debate on the role that artificial intelligence will have to play in the future risks making us rush forward, leading us to look at the technology used today in consultancy, the most recent investments what we have done about it, as something outdated, or worse, wrong. Both would be mistakes. Advisors today more than ever need the support of advanced platforms for analysis and management of their clients’ investment portfolios, but be careful not to fall behind.
In recent years, even from these columns, doubts have been expressed that the machine can oust the consultant. It didn’t happen. This essentially because the professional has known how to be the protagonist of the interaction with the virtual devices: it is he who enters the data, who personalises it, who ensures that the robo advisor always leaves the final decision to the consultant. This, moreover, is the way, the great challenge for the management of advanced AI systems, such as ChatGPT. However, the centrality of the advisor does not mean that AI will not play a role in the future, even an important one, in the service model of financial advisors. Relying on algorithms and machine learning systems has long been a common practice in the financial advisory sector. An inevitable passage also given the amount of information and data, which can be used to prepare the type of investment to offer to the customer. The new robo advisors allow the advisor to do more things, to be more efficient in the required operations – and in this way also to have more time. Through AI, the consultant is able to give a higher level of service to the customer, to satisfy a larger share of his needs. He can also operate marketing strategies, use social channels to make himself visible and acquire new customers. Ultimately, automation makes it possible to indulge in the holistic offer that underlies the idea of consultancy that we have been supporting for some time. A service that takes into account all the customer’s needs, considering his life and that of his loved ones as a whole: from the company, to interests, to travel, to the old age of the parents, to university for the children, to the home for the family.
SKILLS TO BE RENEWED
The question at this point is whether the approximately 30,000 financial advisors and 250,000 employees of the banking sector in Italy will be able to support and make the best use of artificial intelligence. It must be said that very innovative projects have already been prepared by numerous banks and networks of financial advisors, of which I will limit myself to mentioning Fideuram, Fineco, Banca Generali and Azimut. The Covid 19 pandemic – which we recall started in December 2019 in China – among its many consequences, has had disruptive effects on the way we work and has contributed significantly to spreading the use of digital channels in consultancy – a trend that continues today; just think of the diffusion of smartworking. The new scenario, the increasingly advanced progress of AI pose the need not to let our guard down in the organization and evolution of professional skills. Starting from a programmatic knowledge and self-awareness, of a paradigm shift that new technologies presuppose. The consultant can be intimidated by the amount of information, not always reliable and verified on the Al. For this he must know the implications, which come from cybernetics and the sciences of communications, with broad references, ranging from philosophy to psychology to ethics. What is the role of the machine, what is that of man? How can the latter exploit the former without being dominated by it? What is the difference between the human mind and that of artificial intelligence? These are all questions that the consultant cannot answer on his own. To all this then more technical skills will have to be added. First of all, the practical use of the tools, how to operate the machines, how to intervene in the event of a malfunction, how to fully exploit all the potential offered by the equipment. It will then be necessary to intervene on the side of the ability to use technical data sheets, computer graphics, but also those tools that allow remote relationships, such as the digital signature. Technology also poses the need to improve communication skills, since the lack of para-verbal and gestural communication requires the use of different relational techniques. Ultimately, robo advisors, in the light of the progress of AI, are even more the fundamental tool of the financial advisor’s activity.