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  • Robo-Advice: Don’t Self-Diagnose

Robo-Advice: Don’t Self-Diagnose

28 November 2016

I recently did not feel well and decided to go onto Google and search for a possible solution to my ailment. Which I then followed as ‘advice’. The results were dramatic – when I eventually made it to the emergency room at the hospital and endured a stomach pump. The doctor said I could quite easily have died had they not intervened.

There is in my opinion, very little to differentiate medical advice from financial advice from the point of view of living. Granted – the wrong medical advice could kill you, but similarly, the wrong financial advice can leave you and your family with a terminal lack of finance in any number of circumstance, be it death, disability or retirement.

In an increasingly complex world where more and more people go it alone in terms of advice and self-help, there is a tendency to shun real advice from real professional people. This sort of approach is alright up to a point, but would we really risk our health and wellbeing by treating ourselves to what could be a serious medical condition.

In my case, a visit to the doctor and any subsequent advice he would have given me would have avoided a great deal of trouble.

There are any number of providers in the financial services market who have a “Robo-Advice” facility – the client keys in all the relevant details relative to their current financial situation, as well as where they would like to be and the system will spit out a series of answers based on shortfalls and amounts required to be invested.

It's all very surgical and efficient but what it lacks is the experience and professionalism of a qualified financial planner. No two individuals are the same when it comes to financial planning, just as no two individuals are the same when it comes to their health and medical care.

Providing for the correct amount of money in a particular circumstance requires real advice based on an individual’s lifestyle needs and this can only come through human intervention.

My “Robo-Advice” statistical data may tell me that I will need R10 million rand for my retirement, but what of the lifestyle I chose to pursue and what real “Human” advice will this mechanised process give me?

Human intervention in the form of an empathetic and engaged Financial Planner ensures that you deal with someone who has the interests of you and your family at heart and who can engage dynamically with you, knowing your needs and those of your family.

Real financial planning requires an element of counselling – I have yet to come across a machine that shows the ability to empathise. This is beyond the realms of algorithms!

If this “Robo-Advice” turns out to me incorrect, you can be sure that you will have unwittingly signed a number of declarations that effectively immunise the provider from any liability!

Notwithstanding debates that exhort “Rob-Advice” above that of a real professional financial planner, the use of a professional should always be sought – someone who can interpret the statistical data to your particular needs and reassure you that what I am doing is the correct course of action to follow.

Carl Richards is the well-known author of The Behaviour Gap and he says in one of his tweets “Our ability to build trust continues to be something that separates real financial advisors from logarithms” We would be well advised to take heed of this remark.

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