Your Next Financial Adviser Will Be on an App

I see a personal trainer five days a week, and I am now in the best shape of my life. I could not have afforded Doug when I was younger — and I wouldn’t be able to now, either, but for technology. Doug lives on the West Coast and trains me (and dozens of others) through an app. He programs exercises I like, accounting for any injuries, monitors how hard I work, corrects my form and sends me motivational messages. With AI, he now has the potential to make even more custom workouts for even more clients.

I suppose AI could replace him entirely, but the fact that Doug is a real person is important. I know he is watching, and I believe he is invested. I feel like I’ll let him down if I don’t show up every day. I would not care so much if he were a bot.

My experience with Doug is a case study in how to use technology to deliver what was once a high-end personal service to the masses. It is the future not only of fitness but also of financial planning.

In fact, the entire service sector is about to be transformed. Just as the industrial revolution changed the way goods are manufactured and consumed, so the technological revolution will do for services. Once something can be made at scale, the market for it can expand and be segmented; some people may want (and be able to afford) Birkin bags, while others will prefer canvas totes. The same goes for financial planning.

Financial planning is already in state of transition. First, the move to defined contribution pension plans and rising life expectancy means more people need advice. Planning for retirement isn’t easy; you don’t know how long you or your spouse will live, or what health issues will come up, and yet you have to decide how much to save, spend and invest. Sometimes you will just need someone to talk you out of selling when the market dips.

A prevailing theory is that the more money you have, the more financial advice you need. But everyone needs help. And the less you have, the smaller your margin for error. Good advice is less about beating the market than about planning and risk management.