111) Should a UTC Fear the Financial Technology?

111) Should a UTC Fear the Financial Technology?

Many Unit Trust Consultants raised their concerns of the incoming financial technology.

Will the computers replace the Unit Trust Consultants? 

Let's agree that this is a problem raised by many UTCs.

Using one of our favorite phrase...

Every PROBLEM is an OPPORTUNITY for you to provide SOLUTIONS. 

There is fear that computers with the advance technology will replace the Consultants.

In a certain extend, it is true. Computers can and had easily replaced many human tasks.

Many years long, the calculators had already replace human for the task of addition, subtraction, multiplication and division of numbers.You no longer need to use pen, paper and brain power. Just key in the numbers and answers appear within a blink of an eye.

You will notice that the tasks replaced by computers are the tasks that are systematic, standard processes and only simple decisions required. The numbers can be complex, but the computer is super fast in doing its job.

One good example is that computers had replaced humans at ticket counters. It is easy to buy tickets online, using computers for movies, airlines and concerts. Paying bills had also been automated.

Computers had already replaced the simple tasks in many financial industries as well. Now you can already buy the travel insurance online by yourself.

Just fill up your:
a) personal details
b) coverage amount
c) travel dates and destination
d) payment details
You have done buying a travel insurance by yourself.

Take stock buying and selling. The investors are already directly using computers to trade stocks.
Just fill up your:
a) share name
b) share price
c) share quantity
d) wait for transaction confirmation
You have done buying a stock by yourself.

If you study the tasks required, it is easy to complete. There is no other decision to be made. Just decide and key in exactly what you want.

However, when the task is more complicated with many decisions to choose, then it is no longer easy to automate using a computer.

A problem looks very simple when we just look at it from far. However, you will soon realize the complexity once you look deeper. It is even more complex when you start to solve it.

If you have a little knowledge about financial planning, you will find out that it is not that easy to do a full financial plan. 

Investing is easy to be automated. Provided that you really know exactly what you want.

These are few considerations:
a) Investment goal or objective
b) Present value of the goal
c) Inflation rates for each goal
d) Time horizon to achieve the goal
e) Future value of the goal
f) Rate of Return for each investment
f) Amount to invest regularly
g) Is the amount increasing or same throughout
h) Do you wish to stop putting money after some years
i) When to review whether the investment plan is on track
j) How you plan to use the money to pay for the goal

Once you have the answers above, then you have to choose the investment types.
It is no longer just invest or not to invest. 

You will realize that there are many fund types to consider.

Which asset type to choose? Is it:

a) Equity

b) Bond

c) Money Market.

Even after you decide on an Equity fund, there are more sub types:

a) Equity

b) Balanced

c) Mixed Asset

d) Tactical Allocation

Equity funds normally have different percentage ranges of equity, bond and money market.

Next, you have to decide which area you want to invest in. Is it:
a) Local or Foreign
b) One or multiple countries
c) Same or different geographical regions or Global

Another question you need to ask and decide is if you need insurance coverage. Some funds will provide life insurance coverage. Else, you can buy life insurance separately.

With so many considerations to think about, most people will never be able to handle the questions without an Expert's help.

Just imagine that you have never been exposed to these questions before. How are you going to provide answers to the computer? You may not even understand what the computer is asking you.

Financial Planning is not an easy task to complete. 

It takes many years of learning and experience to do a good Financial Planning.

Furthermore, computers are not programmed to accept "what if" situations. The programmers will never to able to think of all possible scenarios combination.

Doing work on a computer also loses the human touch. There are no emotions, empathy, shared joy, understanding the kindness,  fear of the uncertainty, etc. Only another person will be able to relate.

Computers and Internet are already part of our lives. Getting angry and running away because of FEAR is not an option you can take. If you don't manage it, you will be left behind.

If you are a Financial Consultant, do not be fearful of the computer and technology. Embrace the technology to complete and automate the simple tasks.

You can now focus on the HIGH LEVEL Financial Planning tasks.

The simple tasks of fill and submit forms is of low value.
Asking the investor to choose either 1 of the 2 proposed funds is also very low value added.
A computer can easily replace you.

Your main tasks are to help others do their financial planning.
Do think of how much value you can add for your clients.

Use your skill, knowledge and experience to provide the best solutions to your clients' problems. 

More people will need your expertise to solve their more complex problems.
In fact, you should be happy to educate others on financial knowledge.

The more they know, they will realize that there are a lot more to find out from you. 

Then, you will be NEEDED MORE to help them.