Advisor Today - July/August 2015 - (Page 64)

back page 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. T hey're here! "Robo Advisors" in the investment business are challenging the role of human advisors. 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 mechanically motivate 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 or authoritative." 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 has none! 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 19 percent. 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 new sales? 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

Table of Contents for the Digital Edition of Advisor Today - July/August 2015

From The Editor
New Products
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
Divorce DI
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?
Advertiser Index
Back Page

Advisor Today - July/August 2015