Change Is Upon Us
Change is upon us. The future of Paraplanning is moving towards Artificial Intelligence (AI). It’s not a matter of if, it’s a matter of when.
Not only is the Statement of Advice in its current iteration under review for change or removal, but AI is exploding into the mainstream for use in everyday work and personal tasks.As of now, the AI that will be used in Financial Planning will come under Narrow Artificial Intelligence, which Techopedia defines as:
“Narrow artificial intelligence is a specific type of artificial intelligence in which a learning algorithm is designed to perform a single task, and any knowledge gained from performing that task will not automatically be applied to other tasks.“
This means that the following skills (and more) are set be replaced by Narrow Artificial Intelligence in the near future:
- Data entry
- Word Processing
- Modelling
- Portfolio construction
- Insurance selection
- Advice wizard
With these skills in mind, let’s take a look at a breakdown of the standard advice document creation process for a Paraplanner and make note of the areas that AI will be able to assist.
Suddenly, the standard tasks that a Paraplanner performs with the assistance of AI may look something like this:
A quick addition of the minutes above leaves around 90 minutes worth of work for a Paraplanner. Compare that to a Paraplanner’s work without AI, which can take 4-8 hours depending on the complexity of strategies and products being recommended.
Are you ready to have up to 75% of your work impacted by AI? If we look even more closely at the remaining tasks, one may argue that some could even be done in-house by experienced administrative staff, which could further reduce the workload of a Paraplanner.
Now for some good news! Any change to the work of a Paraplanner is going to happen progressively. This transition period opens up tremendous opportunities for change and growth.
If change and growth are not your things, you will likely only have two options:
- Learn how to make them your thing; or
- Find a new career.
The first advantage: Expertise
The first potential advantage is becoming an expert in understanding and using the technology itself. Becoming an expert in AI. If you are a conduit between the technology and the adviser, you become the go-to expert when there are problems, questions, or work to be done.
If learning new technology seems scary or something you don’t want to do, let me just point out that you’ve done this before. You are most likely, to your clients (the advisers), the foremost expert in all things software related: portfolio construction, document wizards, and financial modelling.
In fact, the number one selling point of a lot of Paraplanners is based upon this expertise of knowing the software inside and out, not necessarily the skills in producing an advice document (which is secondary).
Scared of being cut out of the process? As shown in the table above, in the middle of the process is where AI will excel. If you make yourself known as an expert in what AI is doing, it will mean that there is value in hiring you. Make yourself this person they call when there is a problem!
It has certainly been a long time since Paraplanners have had to learn a new technology that underpins the software to create things. Many of the skills for data input and data manipulation were learned a long time ago through programs, browsers, and word documents. You’re going to need to dust off this skill again.
How to start?
AI is here. You need to start learning as much as possible about how it works, what its strengths and weaknesses are, and how they are going to relate to Paraplanning. Becoming an expert requires knowledge and repetition.
The second advantage: Interpretation
AI will only be as useful as the data that is fed into it, and the outputs will need to be analysed to ensure they are correct or useful.
In order to ensure both the inputs and outputs are correct, it is going to require human interpretation and judgement. The ability to apply these skills comes with experience. The more experience one has, the greater their expertise.
If you observe an expert Paraplanner, one of the first things you’ll notice is their laser-sharp focus on what information is present and what is missing. Their experience, through both knowledge and repetition, allows them to see the holes immediately in the data, and they are able to ask for more before proceeding.
Compare that to a new Paraplanner who, upon receiving a request, will often start to input and model straight away. This will result in them either not realising data is missing (leading to an error) or having to stop completely and break their workflow (costing valuable time context switching).
We can take advantage of this insight by aiming to become experts in the interpretation of initial data so that AI systems of the future can be fed the correct information. On the back end, we can analyse the results with our experience and be able to use judgement to ensure the documentation meets the criteria we are aiming for.
How to start?
Start to create systems and methods for analysing the data coming in for Paraplanning requests. You will need to be able to show and explain why you are an expert at interpreting data required for advice documentation. If you have no systems and no explanation, you may not be an expert.
When analysing advice documents, is your expertise showing obvious skills and value above Financial Advisers, administration staff, and AI in finding errors, linking strategies, products, goals, style, and, in general, meeting the criteria of the advice doc?
Embrace the change
If you’re not considered an expert in this, it’s time to build these skills before the transition.The success of future Paraplanners will likely include how well one can augment with Artificial Intelligence. This will require becoming an expert in Artificial Intelligence (at least compared to your clients, the Financial Advisers).
It will then become crucial to upskill your interpretation and judgement of the data that feeds into and out of AI. If we become experts in the underlying system, data, and what we want out of it, then there is no need to fear the coming changes to Paraplanning.
