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[Event Recap] Can a Robot Steal My Job?

Carly Greenberg

This and many other questions were addressed by the annual First Affirmative “Investing for Impact” day-long conference in Boston.  On Tuesday, July 18th, 2017, over 100 SRI professionals gathered at the Hyatt Regency in Boston to discuss pressing issues facing the industry including ESG and Smart Beta, the importance of corporate disclosure and defending shareholders rights to file proposals against The Financial CHOICE Act, and how to continue to keep the needle moving forward on climate change.

But it was the panel, “Beware the Disruptors” that I found most unique. 

A recent PWC study concluded that 38% of American jobs will be lost to Artificial Intelligence (AI) by the early 2030s.  Tom O’Shea, CFA, an Associate Director at Cerulli Associates who is conducting a study on artificial intelligence in the financial industry and was the lead presenter during this panel, added a couple of other mind blowing examples of how AI has already  challenged various professions:

  • In recent tests, IBM Watson was 90% successful at diagnosing cancer in patients where as human doctors were only about 50% successful.

  • Johnson & Johnson has an FDA approved anesthesiologist robot, so in the future, when you go for a surgery, you may be shocked to find a machine instead of a human administering your anesthetic.

  • EdX, a free online learning platform, had more students in one year than Harvard has had in its nearly 400 year history.

Clearly these stats show that there will be winners and losers as AI continues to grow.  Take the first example offered by Mr. O’Shea.  The accuracy of IBM Watson is good for patients even if it is not so good for the job security of doctors.

O’Shea continued to hone an optimistic message.  While ultimately concluding that robots will increasingly take some jobs and tasks away from humans, for many high skilled service jobs robots will not be able to replace humans entirely.  For instance, who would like to receive a bad health prognosis from a robot? Or in the case of law—it would be hard to imagine a jury being emotionally won over by a robo-lawyer, even if the robot did conduct most of the discovery work.

So how will robots change the financial sector? 

This history of robo-advisors provides some insight.  When they first came onto the scene, robo-advisors claimed that they would one day replace traditional advisors.  However these days, most robo-advisors have either been acquired by or have partnered with traditional advisors. Part of the reason for this shift was that it was difficult for robo-advisors to acquire additional customers and bring their products to scale.  Also, there is very little sustainable advantage in robo-advising, since there are low barriers to entry to anyone who can create a financial portfolio allocation algorithm. 

In shops where robo-advisors have paired with traditional advisors, there is a division of labor wherein the robot generates a portfolio and the advisor helps clients digest the robots’ recommendations.  In essence, the robo-advisor forces the human advisor to focus on the more “human” part of the job—such as helping clients process their emotions relating to their money goals and reprioritize in circumstances where goals may be out of reach.

O’Shea advises financial professionals to think about the aspects of their jobs that a robot would be unable to do.  If you view your professional strength as being a numbers sleuth, O’Shea suggests you may find your job increasingly at risk.  However, if you have a charming demeanor and are good at getting clients to feel confident and competent about their finances—you’ll be in strong demand for the foreseeable future.