Twenty-six years ago when I started managing money I thought the business was all about returns. Boy, was I ever wrong. With the benefit of a lot of experience and the things learned from more than a few mistakes, I now understand that being an effective wealth management firm requires us to be managers of much more than money. We also need to understand our clients’ behaviour, emotions and expectations, and we need to help them form and realize long term financial plans.

Everyone who is interested in the investment industry has read an awful lot about computer-driven investing and so-called robo-advisors. I have no doubt that there are some brilliant software engineers out there who can design very sophisticated algorithms that can, in turn, allocate assets and direct buys and sells. Maybe some of them can even do it better than humans. But we also understand what robots cannot do.

During the 2008/09 stock market crash, for about seven months my partners and I were on the phone with clients, in meetings with them, or were busy answering their emails literally around the clock. I vividly remember sitting with clients, in their homes or our offices, who were almost speechless with fear that they would lose their life savings. Many or our clients wanted us to liquidate their portfolios. Many vowed never to go near the stock market again.  We held their hands, both literally and figuratively and looked into their eyes. We told them that selling would be the wrong thing to do, in fact, it would be a disaster. In the end about 97% of our clients took our advice. A mere handful did not. But here’s the point: our connection with them was 100% human, based on their trust that we understood them, understood what we were doing with their money, and that together we could weather the storm.  Robots cannot look you in the eye; they cannot hold your hand; and they will never understand you like another human can.

Many of our relationships with clients and their families stretch over years and even decades. Recently one of our long-time clients called us with the horrible news of a diagnosis of terminal cancer. He was more concerned about his business, about his wife and about his daughter than he was about himself. He needed immediate help to get his affairs in order for the best possible transition. He was unable to travel from out of town to see us. One of our portfolio associates visited him at this home, met with his wife and daughter, explained each document we had prepared, and took the time to ensure that every level of comfort possible was provided. We did our best to make an awful situation slightly less bad. I know that robots don’t make house calls, and I also know that none has yet been invented that has a human heart.

We know that as we move forward with our clients, many of whom are making the transition from working to retirement, we will be spending more and more time on the “soft” side of wealth management, the financial planning and strategic thinking that will ensure that they have the retirement they desire. Each of our client families has things that make them unique, and which require us to use all of our accumulated experience and knowledge to find solutions for them, one by one by one. A computer-driven financial plan would be easier and likely cheaper; but it would not do justice to their needs.  Computers are great tools, and absolutely essential to our business. But they are just that, tools, and not human beings.  We are convinced that they are not ready to replace us.