Irish comedian Frank Carson had a catch phrase many will still recall today: "it’s the way I tell’em". A catch phrase that could easily retrospectively apply to the Post Office management and Fujitsu.
The scandal surrounding the appalling treatment of 736 sub–postmasters and mistresses over so many years by the Post Office (interestingly an FCA-regulated entity) should be ringing alarm bells for all financial adviser firms – smaller one’s in particular regarding the responsibilities that the FCA places upon firms in their drive toward the use of technology to deliver lower cost advice to their clients.
There are some ‘learnings’ for advisers (that all enveloping regulatory excuse phrase) that can be had, as well as some positive ‘outcomes’, another of those regulatory phrases that are rolled out usually when the very opposite happens.
In 2017 the late Stephen Hawking issued a chilling warning about the imminent rise of artificial intelligence. During that interview, Hawking warned that AI will soon reach a level where it will be a "new form of life that will outperform humans".
Advisers should reflect on the possible consequences of bringing the delivery of financial advice into the 21st century. After all, with the smart phone, tablet, AI, ChatGPT and virtual reality all breaking through boundaries, why should financial advice not find itself in the vanguard of change?
It should work, could work, but will not work until something very simple yet clearly requiring a considerable volte-face takes place.
Steve Jobs said that: “Older people sit down and ask, 'What is it?' but the child asks, 'What can I do with it?”.
Smart technology like Google, Siri and Alexa exists. It is readily available in the average home. Algorithm-based analytics are there, right now, to deliver for the mass market an automated method of providing the average family with the ability, beyond just shopping, to self-medicate all sorts of things and self-prescribe a solution.
Why not do this with their financial advice needs? The elephant in the room of progress is the word ‘advice’.
In the financial services world where products are advised/delivered/sold/distributed by the intermediated channel, the buck of responsibility always stops with the financially weakest part of the process, the advisory firm.
In the case of the Post Office and Fujitsu’s Horizon software, for years the linkage of blame fell on that part least likely to be able to defend themselves, the small business sub-postmasters as the software could not possibly be wrong.
I see this exact scenario being easily linked to small financial adviser firms who invested in technology only to find that by adopting its use to provide access to lower cost advice, the potential for blame, if the software has faults, will be placed at their door 10, 15 years later.
Robo or automated solutions should work, it is all in the ‘math’. Very complicated algorithms drive the customer to a very specific outcome.
