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My Financial Advisor is an Algorithm

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For years, financial institutions have sought ways to make true financial advice available online. But did they find a way to satisfy their more independent customers? …

For years, financial institutions have sought ways to make true financial advice available online. But did they find a way to satisfy their more independent customers?

We will talk about the ways in which digital technology is transforming the way we market (and receive) financial advisory services. Take a peek at projects from our research labs.

One features a room designed in a joint effort with the University of Applied Sciences in Darmstadt, Germany: It provides a digitally enhanced advisor-client conversation, using a multitouch table and a screen wall.

The other is seeking to grant investors more control in a more integrated process by creating a platform for both, advisors and investors.

Will digital technologies – one day – create the category killer for personal financial advising or take it to the next level.

Published in: Business, Economy & Finance
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  • Presentation audio is now available on the SXSW website: http://schedule.sxsw.com/2012/events/event_IAP13017
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  • 1. MY FINANCIAL ADVISOR ISAN ALGORITHM
  • 2. What we are going to talk about Three different models for financial advisory !   My financial advisor has an algorithm !   My algorithm has some financial advisors !   My financial advisor is an algorithm
  • 3. Where its at: ClientsLESS TRUST, MOREAUTONOMY
  • 4. Guilty by association Its the stupid economy http://flic.kr/p/bhuqvr
  • 5. Whom do you trust in financial matters? Source: Million Dollar Round Table, Financial Harmony Study 2011
  • 6. Whom do they trust in financial matters? Source: Million Dollar Round Table, Financial Harmony Study 2011
  • 7. Democratization of InformationWe became our own travelagents, insurance brokers, nowwe are learning to use our cell WHY DO WE STILLphones to triage our own bodies. NEED FINANCIAL ADVISORS?
  • 8. The process of financial advisory
  • 9. Finances are serious and complex. A solid financial plan is not aBECAUSE ITS matter of drag and drop.COMPLICATED
  • 10. Model 1PERSONAL ADVISORY ONINTERFACE STEROIDS
  • 11. Model 1!   I am digital.!   I tend to procrastinate financial planning. MY FINANCIAL ADVISOR IS HAS AN ALGORITHM
  • 12. Our Research Project It’s digitally enhanced.A ROOM FOR And face to face.BETTER FINANCIALADVISORY
  • 13. Question 1 A room that supports attitudesWHAT MAKES AN like !   confidence !   privacyATTRACTIVE ROOM? !   curiosity
  • 14. Architecture & InteriorKONZEPTIDEEN ÜBERSICHT Konzept_01_Idee Inselprinzip Konzept_01_Idee Konus Drehtür Konzept Sphäre_rund_Eingang 1 Konzept Rundsphäre_Wall Konzept_01_Ideename Konzept_01_Idee Deckel Konzept_01_Idee Sauna Konzept_01_Idee Schachtel Konzept_01_Idee Holzlamelle/ Textil- Glas KABINE (geschlossener Raum) Konzept Raummöbel_Rahmen_klein Konzept Raummöbel_integrativ Konzept_Glocke_Ring_klein Konzept Raummöbel_Rahmen_integrativ Konzept Raummöbel_Rahmen_integrativ Konzept Raummöbel_integrativ Konzept Raummöbel_Rahmen_integrativ Konzept_Glocke_Ring Konzept Raummöbel_Rahmen_klein Konzept Raummöbel_Gestell Konzept Raummöbel_Rahmen_groß Konzept Raummöbel_Rahmen_Module Konzept Raummöbel_Rahmen Konzept Raummöbel_Rahmen_Varianten RAHMEN (Bauklotzsystem fest) Konzept_Raummöbel_Thron/ Halbei Konzept_01_Idee Wohnsessel Konzept_01_Idee Faltmöbel Konzept_01_Idee Steckplatte Konzept Sphäre_rund_Modul Konzept_Sphäre_Facetten Konzept_01_Idee Babybel Sessel Konzept_01_Idee Wandmöbel 02 Konzept_01_Wandmöbel 01 Konzept Raummöbel_faltbar_groß Konzept Raummöbel_faltbar_klein Konzept_Raummöbel_Faltung Konzept_Raummöbel_Rahmen_Textil Konzept_01_Idee strechbare Wand Konzept_Raummöbel_Rahmen_Textil EINZELTEILE (System frei) Konzept_01_Idee Lampe 02 Konzept Sphäre_schwebend Konzept Sphäre_rund_schwebend Konzept Sphäre_eckig_Holz Konzept Sphäre_rund_schwebend BAND Konzept_Raummöbel_umwickelt Konzept_Trolley Konzept_01_Idee Traverse Konzept_Trolley_Auffalten Konzept_Raummöbel_Scheibe Konzept_Markise Konzept_01_xxx Konzept_01_xxx Konzept_gefalteter Tisch Konzept_Drehmarkise Konzept_Picknickbank Konzept_falbarer Monitor MÖBEL (freistehend) Konzept_01_Idee Lampe 01 Konzept Sphäre_rund_Glocke DECKEL WE CLASSIFIED Konzept_01_Idee Kürbis Konzept_01_Idee Perle BLASE Konzept Sphäre_rund_Innenring RAUM IN RAUM FÄCHER KONFERENZ Konzept_Gürteltier Konzept_Konferenzraum ROOM SCENARIOS Konzept_01_Idee Dach Konzept_01_Idee U-Profil DACH
  • 15. Architecture & Interior: Concept “Bracket“
  • 16. Architecture & Interior: Concept “Bracket“
  • 17. Architecture & Interior: Concept “Bracket“
  • 18. Architecture & Interior: Concept “Bracket“
  • 19. Architecture & Interior: Concept “Bracket“
  • 20. Prototype of Advisory Room
  • 21. Question 2 Devices that support the processWHAT KIND OF of financial advisory face to face.DIGITAL DEVICES?
  • 22. Digital Devices A multitouch table for profiling and product selection. !   It supports the interactive process between advisor and client.
  • 23. Digital Devices A digital wall to permanently provide overview: ! Timeline ! Agenda ! Structure ! Organization
  • 24. Question 3 An interface that advancesWHAT’S A NATURAL !   comprehension ! inspirationINTERFACE?
  • 25. Circle as main navigation element.
  • 26. Circle becomes a multifunctional biomorph interface element
  • 27. The Agenda shows up on the video wall
  • 28. The Agenda shows up on the video wall
  • 29. Profiling: Step „Life Situation“
  • 30. Profiling: Step „Life Situation“
  • 31. Profiling: Step „Life Situation“
  • 32. Profiling: Step „Life Situation“
  • 33. Profiling: Step „Life Situation“
  • 34. Profiling: Step „Life Situation“
  • 35. Profiling: Step „Life Situation“
  • 36. Profiling: Step „Life Situation“
  • 37. Profiling: Step „Life Situation“
  • 38. Profiling: Step „Life Situation“
  • 39. Profiling: Step „Life Situation“
  • 40. Profiling: Step „Life Situation“
  • 41. Profiling: Step „Life Situation“
  • 42. Profiling: Step „Life Situation“
  • 43. Profiling: Step „Life Situation“
  • 44. Profiling: Step „Life Situation“
  • 45. Profiling: Step „Life Situation“
  • 46. Model 2NETWORKEDFINANCIALADVISORY
  • 47. !   I am social.!   I‘m used to information and interaction online. MY ALGORITHM HAS SOME FINANCIAL ADVISORS
  • 48. Advice is collaboration. !   I can learn about investingA COMMUNITY OF !   I manage my plan !   I get input from family, friends and financial professionals.FINANCIAL ADVICE
  • 49. Advice is collaboration Investment Goals and decisions finances Financial advisors Spouse Tax advice College savings Accountant Estate planning Children Attorney
  • 50. Advice is collaboration Pete Smith: Jim, I’ve just taken my first job with a 401(k) plan. I’ve shared my retirement plan Pete’s career with you. I know you understand this stuff. Can Pete’s retirement you have a look? Pete’s 401(k) 2012 2022 2032 2042 2052 2062
  • 51. Advice is collaboration Pete Smith: Jim, I’ve just taken my first job with a 401(k) plan. I’ve shared my retirement plan Pete’s career with you. I know you understand this stuff. Can Pete’s retirement you have a look? Jim Smith [Brother]: You’re doing the right thing Pete’s 401(k) by starting to save now. Make sure you find out about the other investment options in your plan, though. Right now, your contributions are going Robbie’s college into a money fund. Also, you should think about saving for Robbie’s college education, too. 2012 2022 2032 2042 2052 2062
  • 52. Advice is collaboration Pete Smith: Jim, I’ve just taken my first job with a 401(k) plan. I’ve shared my retirement plan Pete’s career with you. I know you understand this stuff. Can Pete’s retirement you have a look? Jim Smith [Brother]: You’re doing the right thing Pete’s 401(k) by starting to save now. Make sure you find out about the other investment options in your plan, though. Right now, your contributions are going Robbie’s college into a money fund. You should think about 529s for Robbie’s college education, too. Pete Smith: Where can I find out about that? Jim Smith [Brother]: My broker, @George.Jones, set up the accounts for my kids. Friend him and he can tell you how it works. 2012 2022 2032 2042 2052 2062
  • 53. Advice is collaboration Pete Smith: Hi, George. My brother Jim said you might be able to help me with investments for my Pete’s career son Robbie’s college. Pete’s retirement Pete’s 401(k) Robbie’s college 2012 2022 2032 2042 2052 2062
  • 54. Advice is collaboration Pete Smith: Hi, George. My brother Jim said you might be able to help me with investments for my Pete’s career son Robbie’s college. Pete’s retirement George Jones [Advisor]: Happy to help. You should consider your state’s 529 plan so your Pete’s 401(k) contributions will be tax-deductible. Start saving $200 each month, and you can increase it with your raise next year. Robbie’s college Robbie’s 529 2012 2022 2032 2042 2052 2062
  • 55. Advice is collaboration Pete Smith: Hi, George. My brother Jim said you might be able to help me with investments for my Pete’s career son Robbie’s college. Pete’s retirement George Jones [Advisor]: Happy to help. You should consider your state’s 529 plan so your Pete’s 401(k) contributions will be tax-deductible. Start saving $200 each month, and you can increase it with your raise next year. Robbie’s college George Jones [Advisor]: Since your son will be Robbie’s 529 entering college in 16 years, I recommend a growth-oriented approach, with a fixed income fund for balance. 2012 2022 2032 2042 2052 2062
  • 56. Advice is collaboration Pete Smith: Hi, George. My brother Jim said you might be able to help me with investments for my Pete’s career son Robbie’s college. Pete’s retirement George Jones [Advisor]: Happy to help. You should consider your state’s 529 plan so your Pete’s 401(k) contributions will be tax-deductible. Start saving $200 each month, and you can increase it with your raise next year. Robbie’s college George Jones [Advisor]: Since your son will be Robbie’s 529 entering college in 16 years, I recommend a growth-oriented approach, with a fixed income fund for balance. Pete Smith: That looks great. How do I get 2012 2022 2032 2042 2052 2062 started? George Jones [Advisor]: You can open an account online at http://www.myState529Plan.org.!
  • 57. Engagement is value for the advisor. !   I know right away when mySOCIAL FINANCE client’s plans change. !   I see their whole financial picture.OPTIMIZES ADVICE !   I have many more opportunities to bring value to the relationship.
  • 58. Model 3THEALGOVISOR
  • 59. !   I am mobile and social.!   I accept my data being collected and used if it serves MY FINANCIAL me.!   I have no time or motivation to become an expert in investing. ADVISOR IS AN ALGORITHM
  • 60. Choices, choices, choices…See what people are tweeting #SXSW? Find the best IRA and plan my retirement?
  • 61. By being ubiquitous yetSO HOW CAN AN unobtrusive.ALGORITHM HELPME?
  • 62. Advice is based on data. !   I don’t want to learn aboutAN AUTOMATIC investing. !   I don’t have time to manage my plan.FINANCIAL ADVISOR !   I trust the Algovisor that knows more about me than any financial advisor ever would.
  • 63. “Because investing is very individual and personal”The advisor needs to know mylife, my goals, my finances. SO MANY ALGORITHMS ALREADY DO
  • 64. They know more than I would tell my financial advisor.
  • 65. The all seeing Algovisor
  • 66. The Algovisor uses MY interface Sylke, you cancelled Great. I sent them to the your trip to Australia. I Algovisor App, along with am going to move the some details about the funds we set aside for individual funds. that into your xyz account. Okay? Yes OK I will allocate the funds according to our current portfolio model. Do you want to review the trades I am proposing before I buy? Sure
  • 67. Thank you for coming#SXALGOVISOR !   Download slides www.mediaman.net/algovisor !   Contact Sylke.Laine@mediaman.net

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