Humans Leave Financial Services to Start Financial Decision Business


Notice I didn’t say financial planning. The traditional financial services business is evolving unlike any time in our history thanks to the speed of innovation in technology. As retail stores are trying to figure out how they will survive the great Amazon effect, so too will our beloved financial services industry continue to see significant distribution pressures. That change is not a reflection on the value provided by the hundreds of thousands of experienced professionals delivering good advice and execution to solve real problems for households. This evolution is about price, speed and choice of products and how they are disruptive to the current distribution model.

For those professionals who will thrive in the renewed model of our industry, there is an opportunity to double down on our human value proposition. Just as RoboAdvisors have spent the last year adding human advisors to complement their technology, human advisors are learning that they need to provide comparable technology experiences to their clients. And very much as it was intended, the financial services business will have to focus on the value and experience it provides to consumers in becoming a financial decisions business.

A financial decisions business means that we help clients make good financial decisions when their choices remain complex and there is a high cost of being wrong. The human condition of finding certainty and confidence in a experienced advisor is not going to change overnight. And if Google’s mind-boggling 2 Billion search results, or the current retail path of unlimited options has shown us, too many choices cause paralysis and confusion when making big decisions.

Just as too much financial analysis doesn’t provide greater clarity, sometimes we need to break down that complexity into simple consumable parts in order to make a confident decision. This positioning as a financial decision advocate is different than that of a financial planner and I want to be clear on this. My own journey to earn my CFP and ChFC heavily influenced my experience in the business to become an advocate of sound analysis and suitable recommendations. However, I will also share that for years that I think I was the only one reading my 80-page analysis. Customers on the other hand wanted only the summary and findings after months of crunching numbers. And so I was reminded in the early days of Asset-Map that in an era of continued struggle for everyone’s limited attention span, we have to apply our brains to our clients’ condition in real time- not just our formulas.

We have to promote Advisor Intelligence - not just Artificial Intelligence.

While commodity products will see disintermediation from direct to consumer technology, human professionals will continue to dominate the areas of our business where customers have to make difficult decisions they can’t afford to ‘do-over’. Most of us won’t get a second chance to retire and have our assets outlive us, or to exit our family business twice, or go back and fix our estate planning post-mortem, or even say ‘I should have been more thoughtful of taxes’.

There are just some decisions in life that humans will want another competent human to help them make. Since there is no reset button and life is uncertain, our decisions are left as the only things we control.

The challenge for the future leaders of the financial services industry focuses on finding ways to help others examine their current (often haphazard) financial decisions, provide education and alternatives that serve them, and remain an advocate over time to make sure those decisions are still sound and aligned with their priorities and conditions. This is how the human advisor will continue to remain relevant through continued investment in their education, a concise approach to simple-rich communication, and a whole lot of good-ole fashioned honest decision making skills.

About The Author

H. Adam Holt, ChFC®, is the Founder and Chief Executive Officer of Asset-Map, LLC.