Today we have access to all the world’s information, indexed by search engines and retrieved by digital assistants. “Alexa, what is the average rainfall in Seattle during June?” If we wanted to, we could shut off all communication to other human beings and solely develop our worldly knowledge from Google. But as humans, we are inherently social creatures that are inclined to work together. As technology rapidly evolves thru artificial intelligence and a convergence of human and machine thinking, it is going to be harder to delineate the benefit of working with a human vs. computer. I do believe that humans will not be replaceable (hopefully) in the areas of guidance, friendship, comfort and support.
Software can watch my house, order my groceries, do my taxes, monitor my health, and most importantly, help me order ahead and skip the line at Starbucks. Software is going to have a hard time of offering assurance, confidence, empathy, constructive criticism and guidance on a level that resonates with human emotion. These are all traits that operate in the experience of investing and why I believe highly in the enduring role of an investment advisor. Our role isn’t to be a salesperson, but rather a guide. A guide to help families through the challenges and opportunities of money and its effect on lifestyles.
The investment advisory industry is packaged in all shapes and sizes. There are certainly wolves in sheep’s clothing and alignment of interest is something that still (unfortunately) remains conflicted with those who prioritize gathering more and more assets under advisement rather than quality of advice.
When you are evaluating the need or use of an investment advisor, I’d look for someone (or something) that can offer the following:
- Build your custom wealth roadmap – You will have a destination in mind, and they can map the route(s).
- Humans tend to be their own worst adversary – people have biases that can act against their investing goals. Good advisors can help neutralize those behavioral pitfalls and keep you focused.
- There is lots of noise and few signals – a good advisor helps discern what’s relevant, reliable and realistic in the flood of information.
- It’s not all about being disciplined – just as a good advisor can help neutralize bad investment behavior, they should embrace and encourage any interests in investing or (appropriate) risk taking.
A good investment advisor makes their client’s goals the top priority. They must connect on a personal basis and not a product basis. They must be knowledgeable and relatable. They must be, in a way, indispensable. Yes, a lofty requirement, but I view it as validated by simply a client saying, “I’m sure glad we have them helping us out.” After all, investing is as personal as it is fundamental.