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Why Financial Advisors will never be Replaced by AI

Advancements in technology and IoT have revolutionized our society, making systems simpler and more efficient. Although this is a welcome development in most industries, the financial industry and personal insurance sector present some challenges worth considering. Robo-advisers and online insurance comparison platforms may make purchasing insurance policies more accessible, but they lack some crucial elements that a human touch can provide.

While robo insurers and online comparison platforms have their advantages, they are not likely to completely replace financial advisors. Here are a few reasons why:

  1. Personalized advice: Robo insurers make recommendations based on fixed parameters and algorithms, whereas a human financial advisor can provide personalized advice based on your specific financial situation, goals, and risk tolerance.
  2. Applied life experiences: A financial advisor brings a wealth of experience and expertise to the table, including their past experiences with clients and in the financial industry. They can use this knowledge to better serve you and provide customized solutions.
  3. Two-way communication: A financial advisor can provide support and direct answers to your financial concerns, and they can also provide a human touch that robo insurers lack. This includes being able to listen to your concerns and provide non-generic solutions, as well as helping you navigate complex financial situations.
  4. Customized values: While robo insurers can cover shortfalls and potentially save you money, a financial advisor can provide a more holistic approach to your finances. This includes considering aspects of wealth protection and insurance that are intertwined with other financial planning disciplines, as well as looking at your needs and values at different stages of life.
  5. A supportive hand in times of distress: In the event of an accident or a traumatic experience, a financial advisor can hold your hand through the process and help you navigate the complexities of your insurance policy. They can also champion your cause and fight on your behalf, ensuring that you receive the protection and benefits you are entitled to.

As a financial consultant, I understand that insurance policies can be complex and nuanced, with variable options and add-ons that may suit your lifestyle better. Moreover, there are situations that require personal attention, such as when a client needs help restructuring multiple overlapping policies or addressing concerns about pre-existing medical conditions.

As humans, we crave connection and the assurance that someone is listening and providing us with non-generic solutions. A financial consultant can provide this support while also customizing insurance policies to fit the specific needs and values of each individual.

I know from experience that life is full of unpredictable events, and in times of distress, having someone to hold your hand and champion your cause can make all the difference. Furthermore, a good financial planner can source cost-efficient and effective solutions for clients, especially those with pre-existing conditions that may limit their access to comprehensive coverage.

Although robo-insurers have their place in the insurance industry, they cannot replace the value that a human financial consultant brings. It’s important to weigh the benefits of online insurance policies against their costs and limitations.

Take the time to understand the products and evaluate your own risks accordingly, or consider speaking to a financial consultant who can help build a bespoke coverage plan for you.

While robo insurers and online comparison platforms can provide a simpler point of sales process and promise cheaper premiums, they cannot replace the personalized advice, applied life experiences, two-way communication, customized values, and support provided by a human financial advisor. As a financial consultant, I see my role as that of an chaperon, guiding clients through the complex terrain of insurance policies and helping them make informed decisions that meet their specific needs.

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