Advisor Today - July/August 2015 - (Page 64)
By Brian Ashe, CLU
Artificial Intelligence in a Real World
Technology provides access to information, but has never shown up at a wedding or a funeral.
hey're here! "Robo Advisors"
in the investment business are
challenging the role of human
As respected commentator Russ
Alan Prince said in an April 12,
2015, article of Forbes titled, "How
Artificial Intelligence Will Eliminate
the Need for the Vast Majority of
Life Insurance Agents," "Robo
Agents" will eventually replace live
insurance professionals, too.
Now, I'm a believer in technology
making our lives easier and more
efficient. Just look at personal
computers, smartphones, the Internet,
on board automobile computers, GPS
and a host of other developments,
and it's hard to deny their efficacy in
improving the human condition.
And maybe, if the "Robo Agents"
are perfect because they aren't
human, we can eliminate all this
discussion about the "fiduciary
standard" and "suitability"-because,
of course, their advice would always
be correct, timely and unbiased.
We are led to believe there would
be no problems anymore-unless we
also honestly note that the programs
designed for these "Robo Advisors"
are created by humans-humans
with differing philosophies, biases
and points of view.
And when it comes to the
confidentiality of the financial
foundations of our families and
businesses, I guess our "Robo
Advisor" enthusiasts would like us
to forget things like the NSA getting
hacked, the IRS supposedly losing
all of a Lois Lerner's emails, and
Target having millions of its credit
card records compromised. Are we to
believe cybersecurity will be perfect?
Information vs. advice
I think there's a difference between
"information" and "advice."
64 ADVISOR TODAY | July/August 2015
Will "Robo Advisors"
suddenly, magically and
millions of new sales?
Technology provides access
to lots of information. But the
definition of "advice" is "guidance
or recommendations concerning
prudent action typically given by
someone regarded as knowledgeable
Technology seems transactional
and little more than a sterile binary
exercise. It has never shaken my
hand, looked me in the eye, laughed
or wept with me, showed up at a
wedding or a funeral, or provided
me with meaningful, useful insights
based on its experience-because it
Let's face it. Most of this "robo
advisor" noise is based on one
thing: money. Sellers think they can
knock down their distribution cost,
and buyers think they can get what
they need less expensively.
But the cost of life insurance
has dropped 40-60 percent over
the last 30 years, and we still
sell fewer policies today, even
though the number of households
with dependents-our prime
prospects-has increased by over
What has also decreased
concurrently is the number of
advisors and meaningful financial
support to help them educate
the buying public. Will "Robo
Advisors" suddenly, magically and
mechanically motivate millions of
Prince seems to think that
with the elimination of human
insurance professionals, the largest
user of "Robo Advisors" will be
lawyers and accountants serving
their clients' insurance needs for a
very modest "robo" fee.
Well, first of all, why are
lawyers and accountants immune
from becoming "robotized?" Why
couldn't we see a shingle hung
out for "Roomba and R2D2,
Attorneys at Law"? And, secondly,
has it been your experience that
attorneys and accountants race
their competition to the bottom to
see who can charge the lowest fee?
Artificial intelligence, by
definition, is a copy of human
intelligence. Some prognosticators
even think artificial intelligence
and human intelligence will,
in the future, become one and
indistinguishable. I hope they find
some way to keep the soul.
Brian Ashe, CLU, is president of
Brian Ashe and Associates, Ltd. in
Lisle, Ill., and the 2012 recipient of
the John Newton Russell Memorial
Award. A past president of MDRT
and past chair of LIFE, he may be
contacted at firstname.lastname@example.org.
Table of Contents for the Digital Edition of Advisor Today - July/August 2015
From The Editor
How Do You Create the Million-Dollar-Plus Practice?
Traits of Top Performers
The Business Benefits of a Pipeline Mentality
What Does It Mean to Act Ethically?
Variable Universal Life is Back
Sell More LTCI By Selling Less!
Overcoming the Most Common DI Objections
Mitigating Retirement Risks with Life Insurance
Creating Irreplaceable Capital
Closing the Gap
Financial Future Less than Rosy for Boomers and GenX
Estate Planning and Annuities?
Ignite Your Sales Potential
A Closer Look at BTID
Upholding the Tradition
NAIFA’s Candidates for Election
Addicted to Rejection
What is Keeping Your Senior Clients Up At Night?
Advisor Today - July/August 2015