/ Technology

AI and paraplanning: How to get ready

By Becca Timmins

You can’t move at the moment without seeing or hearing something about artificial intelligence (AI).

After years of what has felt like a major lack of innovative tech in financial planning, it seems the rise of machine learning has accelerated things and it’s now moving at an incredible pace.

One area where I’m hearing a lot of noise in particular is in relation to report writing for clients.

For as long as I can remember, this has been an issue in firms. Recruiting quality, experienced paraplanners has been and continues to a challenge. So, the capacity to do the necessary research, write high quality personalised reports, in plain English that a client will really understand and act on, has always been a source of pressure. 

The general wisdom has been, there’s good, cheap and fast. Choose two – you can’t have ‘em all!

The idea then, of AI-driven software that could write 10 personalised reports in less time than it takes a person to write one, is understandably appealing for any business owner.

The next question then…

Could this mean the end of the paraplanner? 

I don’t believe that AI poses a real threat to jobs and to the profession in general.

I do believe that the paraplanner role will evolve, and we would be much better thinking about that now, than leaving it until we have a lot of disillusioned people on our teams.

There will probably be companies that leverage AI to provide a human-free financial advice service. I think anyone who still works on a more transactional basis should be worried about that disruption to their “service”.

But real financial planning is so fundamentally human that people will be a vital part of the equation for a long time yet. Instead, AI will enable tools that increase capacity and free up time for the people providing the service.

How to invest the savings

There might be some who use it as an opportunity to reduce headcount and increase profit margins, but I don’t think pure profit is the main driver for most high quality financial planning firms.

Perhaps the good firms will use advancing tech to drive costs down after years of compliance costs driving them up. Perhaps they will pass that saving on to clients and we will see more affordable planning services. 

Maybe some will see the opportunity to provide more of the human, personalised services that clients really value.

Others might see opportunities to close the advice gap and provide a profitable service to clients with less to invest. I think it’s how we choose to use that saved time and cost that define what happens next. That’s an exciting conversation we can start to have right now.

Human involved AI

The NextGen Planners Techstack podcast recently interviewed Advisory AI’s Alan Gurung about this very topic and it’s well worth half an hour of anyone’s time. 

Advisory AI is developing software for planners that includes AI generated reports. He made some really interesting points about the need for what he termed “human involved AI”.  

Firstly, that financial planning needs a combination of logical technical knowledge (which computers can handle) and emotion (which they can’t).

He used the example of deciding whether or not to repay a mortgage. The financials of that decision might not make logical sense taken on their own. But the peace of mind for the client might mean it is still a good decision. It’s important to understand both, to give the right advice.

Secondly, that AI can misinterpret, and even hallucinate. (You can find out more about AI and hallucinations here)

So, if you rely solely on AI-powered tools to summarise your meeting notes or write your reports, you’re in pretty dangerous territory. You could unwittingly cause major issues in terms of getting it right for the client and your compliance records.

For the foreseeable future at least, AI tools can do the grunt work, but they will need human training, intervention and checking to make sure they get it right.

Fear of irrelevance

I am a big fan of the leadership work of Brene Brown (her book Dare to Lead is a must read for any leader). Her research shows that the feeling most likely to push someone into deep shame at work, is the fear of irrelevance.

If we keep talking about AI writing reports quicker, cheaper and better than people, we could easily trigger a fear of irrelevance that pushes our paraplanners into a deep shame spiral that quickly undermines motivation and performance.

Think big, and talk change 

Naturally, many people find change hard, and the people who will be affected the most will typically find it hardest.

We often avoid asking questions about how people feel about change because we’re scared of the can of worms it might open up. That isn’t how it works though. Acknowledging the fears and feelings means we, and they, understand them better. This is really useful information.

My suggestion then, is to come at this from three angles:

  • Start to experiment with new tech and tools. Understand where and how they might work for you and save time. If you don’t embrace these changes, you WILL get left behind the pack and lose competitive advantage.
  • Educate yourself far more broadly than just sales pitches about what the next amazing bit of kit could do for you. Listen to people like Dr S. Craig Watkins, here on the Unlocking Us podcast. Take time to think about what this means.
  • At the same time, open up conversations with those whose roles the technology will impact. Acknowledge potential fears and be honest that change is coming. Share what you all think that might mean.  

Conversation prompts for humans

I suggest that as soon as possible, and definitely within the next six months, you gather your team together and ask for everyone’s views. You could try questions like:

  • With AI advancing at the rate it is, what do you think the role of a paraplanner / administrator / adviser could become over the next decade? 
  • What tasks that you currently find frustrating or annoying do you think AI might be able to do instead? 
  • If you had infinite time and money, what would you be doing more of, to add real value to our clients? 
  • If we had more time to spend on each client to give them a service they couldn’t help but shout about – what might we be doing more of? 
  • What are the parts of your job that you REALLY love and would be excited to do more of?

You get the idea. Get creative, and stay curious.

Make it safe

This is a vulnerable area for people to be honest about and open up, so there are some simple steps you can take to make it feel safe. 

  • Set the scene – make it clear that you are curious, there will be no judgement and you want to hear honest views. 
  • Remain neutral – You may be surprised about what you hear, and you might not even like some of it. That’s okay, as you’re there to learn. Just watch your facial expressions don’t give away an internal judgemental response which could inadvertently shut people down.
  • Think in turn – Go around the group in order and give every person the opportunity to contribute.
  • Promise not to interrupt – An interruption says: “What I have to say is more important than what you are about to think”. There is nothing more likely to stop someone thinking and sharing. So, ask everyone to make this promise at the start of the discussion.

While AI will undoubtedly change the financial planning landscape, I really don’t think it will spell the end of the paraplanner.

By involving team members, acknowledging fears, and strategically investing in AI-driven efficiencies, a forward-thinking firm could work with their paraplanners to create a new and exciting future. 

Becca Timmins is a coach and facilitator at When We Think

For more on paraplanning in the Age of AI, check out this recent webinar from the Paraplanners’ Assembly.

You can also find out more about the emerging tech and AI coming soon to the advice sector at our AdviceTech Catwalk event in June

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