Technology isn't a threat, it's an opportunity

20 February 2018 | Topical insights


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Tom Rampulla, head of Vanguard's financial intermediaries group in the United States, shares his perspective on the future of advice.

Are we dinosaurs amid all this disruption?

I'm just back from the 2018 Inside ETFs conference, held in Florida, where in between conversations about market returns, factors and Bitcoin, there hung this question about advisers' livelihoods in a world that grows more digital by the day. It's a concept bigger than ETFs, and it's a message we all need to hear: Change, or forever be changed.

Tim Buckley, my new boss and Vanguard's new CEO, broke it down pretty explicitly in his opening keynote address. Your job of looking out for your clients' livelihoods is here to stay, but you need to rethink the tasks you do every day. While this is daunting, amazing opportunities await if you embrace this path forward.

A fair amount of gloom-and-doom research has stated that millions of jobs are susceptible to automation and will just disappear. We fundamentally disagree: While there are tasks today that will be automated away, jobs will evolve to increasingly revolve around advanced, uniquely human tasks, such as strategising and solving problems.

Uniquely human tasks - Brain activity image

So what are automation's implications for advice? No doubt about it, computers have just about perfected portfolio construction, driving the core costs of advice down, but the data show that what clients really want is something computers can't provide. And therein lies the opportunity.

A gateway to success

Technology and automation aren't threats at all. They are the gateway to future success, perhaps much more success than even the best advisers could build on their own. They free up time so you can focus on the ways in which you can add the most value: behavioural coaching, customised retirement income solutions, long-term care planning, insurance coverage, estate planning and the like.

What's in it for you? Deep bonds. You've invested a lot of time getting to know your clients inside and out so you can provide creative, custom solutions. Where does that get you? You're no longer simply a price comparison; clients don't even think about not having you at their sides. And they tell their friends, families and colleagues just how good you are.

We shouldn't fear or fight technology; we should use it to do things better, faster and cheaper. Enough gloom on where advice is headed; advisers should be energised. Let your value shine through your creativity, coaching and customisation – things a computer will never be able to do.

You will thrive.

Tom RampullaTom Rampulla
Head of Vanguard's financial intermediaries group


Adviser's Alpha: You make the difference

Important information:

This article is directed at professional investors and should not be distributed to, or relied upon by retail investors.

This article is designed only for use by, and is directed only at persons resident in, the UK. It is for educational purposes only.

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested. Past performance is not a reliable indicator of future results.

The material contained in this article is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so.

The information on this article does not constitute legal, tax, or investment advice. You must not, therefore, rely on the content of this presentation when making any investment decisions.

The opinions expressed in this article are those of the individual author and may not be representative of Vanguard Asset Management, Limited.

Issued by Vanguard Asset Management, Limited which is authorised and regulated in the UK by the Financial Conduct Authority.


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