Paraplanners must take advantage of the development in Artificial Intelligence (AI). They must adapt and become the ‘go to’ people in their business when it comes to using the technology, according to speakers at Ian McKenna’s Empowering Advice Through Technology (EATT) conference. Rob Kingsbury reports.
In his keynote speech at EATT, Ian McKenna told delegates that they should be ‘planning for an unprecedented level of change” within the market as technology, and notably AI, continues to disrupt the industry.
In particular, he said, AI would be “transformational for knowledge workers” – those whose value is based on the technical knowledge they hold. “Knowledge is no longer power, as it will be available in nano seconds through AI. The skills we need tomorrow will be very different to the ones we have had historically,” he said.
But it will not be a matter of the paraplanning role being taken over by technology, rather the more effective use of technology as a tool within the business, and the paraplanner role evolving to be able to best use those tools.
Many of the day-to-day tasks of the paraplanner will be carried out by technology, the conference heard – “they will do the heavy lifting”. Suitability report writing is becoming ever more prevalent in AI software now available to the adviser market, and software such as advisoryai has introduced a real-time compliance checking tool that will make the reports even more accurate.
In polling on the day, over 50% of delegates said they had already deployed at least one AI solution within their business, while another 20% said they were in the process of doing so.
Asked how they saw their advice firm changing over the next five years, some 70% of delegates predicted that they would need ‘less admin staff and paraplanners and more advisers’.
However, Ian McKenna said that while “there will be people feeling very vulnerable right now”, AI would only effect jobs “if you try to stay as you are.” He emphasised the need for paraplanners and administrators to look ahead and enhance their skills to better suit the tech-driven environment that is opening up in the advice market. “The opportunity to retrain and adopt new skills, to be so much more valuable within the business, can strengthen your situation,” he said.
Drawing information from the World Economic Forum’s “Future of jobs report 2025’, McKenna highlighted the most important skills the Forum predicts will be needed between 2025 and 2030 if people are to be employable in five years’ time. These were:
- Analytical thinking
- Resilience, flexibility and agility
- Leadership and social influence
- Creative thinking
- Technology literacy
Sapna Shapero, Programme manager – Operations at Chesterton House Financial Planning, said there was no part of a financial planning firm to which AI “can’t make a significant difference”.
The company was laying down the foundations of change, and where it was seeing the most change, she said, was in the back-office, in the paraplanner and administrator roles,
“As we move away from the more manual day-to-day tasks that AI can take care of, there is a greater focus on data integrity and data management. The teams are making sure the outputs we are getting from the AI tools we are using are accurate.”
McKenna emphasised that firms will want to hold on to their talented staff. “They will want to help existing team members move into new roles,” he said.
And paraplanners in general, are already upskilling in their roles, Shapero added, “becoming part of investment committees and governance and compliance within their firms”, as well as becoming more client facing, the human element of the business that AI cannot replace.
Jeff Lange, CEO of TFAS Wealth, a remote advice business, said the business had looked at where the inefficiencies were in the business and which AI solutions could be plugged in to address them and help “make sense of what is a complex tech stack world around us”.
With regard to jobs, he quoted Jensen Huang, CEO, Nvidia, who said:
“AI is not going to take your jobs; the person using AI is going to take your jobs. Use AI as fast as you can, so you can stay gainfully employed.”
Paraplanners and administrators, Lange said, are going to be the ones who are going to have to become efficient in the use of AI systems. In the near term, he said neither “should be super worried about losing their jobs”, what AI will do is create more efficient ratios of paraplanners and admin to advisers.
And, as the poll of delegates revealed, firms are looking to increase their capacity through hiring more advisers.
Going forward, however, as the emphasis of paraplanning moves from the more traditional element of the role, such as suitability report writing, paraplanners must look at where they can add most value, whether that is becoming adept at using AI within the financial planning process or moving into a more client facing role.
Adaptation will be the name of the game and how that plays into better service and outcomes for end clients and more opportunities for advice businesses.
Main image: nat-9l98kFByiao-unsplash
