my financial advisor is an algorithm

MY FINANCIAL ADVISOR IS AN ALGORITHM

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

Where it's at: Clients

LESS TRUST, MORE AUTONOMY

It's the stupid economy

Guilty by association

http://flic.kr/p/bhuqvr

Whom do you trust in financial matters?

Source: Million Dollar Round Table, Financial Harmony Study 2011

Source: Million Dollar Round Table, Financial Harmony Study 2011

Whom do they trust in financial matters?

Democratization of Information

WHY DO WE STILL NEED FINANCIAL ADVISORS?

We became our own travel agents, insurance brokers, now we are learning to use our cell phones to triage our own bodies.

The process of financial advisory

Finances are serious and complex.

BECAUSE IT'S COMPLICATED

A solid financial plan is not a matter of drag and drop.

Model 1

PERSONAL ADVISORY ON INTERFACE STEROIDS

Model 1

MY FINANCIAL ADVISOR IS HAS AN ALGORITHM

!   I am digital. !   I tend to procrastinate

financial planning.

Our Research Project

A ROOM FOR BETTER FINANCIAL ADVISORY

It’s digitally enhanced. And face to face.

Question 1

WHAT MAKES AN ATTRACTIVE ROOM?

A room that supports attitudes like !   confidence !   privacy !   curiosity

Architecture & Interior

WE CLASSIFIED ROOM SCENARIOS

Konzept_01_Idee Wandmöbel 02 Konzept_01_Wandmöbel 01

Konzept_01_Idee Traverse

Konzept_01_Idee Faltmöbel

Konzept_01_Ideename Konzept_01_Idee Holzlamelle/ Textil- Glas

Konzept_01_Idee U-Profil

Konzept_01_Idee Steckplatte

Konzept_01_Idee Leinwand

Konzept_01_Idee Kürbis

Konzept_01_Idee Dach

Konzept_01_Idee strechbare Wand

Konzept_01_Idee Lampe 01

Konzept_01_Idee Babybel Sessel

Konzept_01_Idee Aufzug

Konzept_01_Idee Perle

Konzept_01_Idee Wohnsessel

Konzept_01_Idee Konus Drehtür

Konzept_Glocke_Ring_klein Konzept_Glocke_Ring Konzept Raummöbel_Rahmen_klein

Konzept Sphäre_rund_Glocke

Konzept Sphäre_rund_schwebend

Konzept_01_xxx Konzept_Picknickbank

Konzept_Raummöbel_Rahmen_Textil

Konzept Sphäre_rund_Innenring

Konzept Rundsphäre_Wall

Konzept_Gürteltier

Konzept_Raummöbel_Rahmen_TextilKonzept_Raummöbel_Faltung

Konzept_gefalteter TischKonzept_Trolley

Konzept Sphäre_eckig_Holz

Konzept_Raummöbel_ScheibeKonzept_Trolley_Auffalten

Konzept_Sphäre_Facetten

Konzept Sphäre_rund_schwebendKonzept Sphäre_schwebend

Konzept Sphäre_rund_Eingang 1

Konzept_falbarer MonitorKonzept_Markise

Konzept_Konferenzraum

Konzept_Schlauch

Konzept_Raummöbel_Thron/ HalbeiKonzept Sphäre_rund_Modul

Konzept_01_xxx Konzept_Drehmarkise

Konzept Raummöbel_faltbar_groß

Konzept_Raummöbel_umwickelt

Konzept Raummöbel_Rahmen

Konzept Raummöbel_faltbar_klein

Konzept Raummöbel_integrativ Konzept Raummöbel_Rahmen_Module Konzept Raummöbel_Rahmen_VariantenKonzept Raummöbel_Gestell Konzept Raummöbel_Rahmen_großKonzept Raummöbel_Rahmen_klein Konzept Raummöbel_integrativ Konzept Raummöbel_Rahmen_integrativKonzept Raummöbel_Rahmen_integrativKonzept Raummöbel_Rahmen_integrativ

Konzept_01_Idee Inselprinzip

Konzept_01_Idee Lampe 02

KABINE(geschlossenerRaum)

RAHMEN(Bauklotzsystem fest)

EINZELTEILE(System frei)

BAND

MÖBEL(freistehend)

DECKEL

BLASE

RAUM IN RAUM

FÄCHER

KONFERENZ

DACH

SCHLAUCH

AUFZUG

LEINWAND

Konzept_01_Idee SaunaKonzept_01_Idee Deckel Konzept_01_Idee Schachtel

KONZ

EPTI

DEEN

ÜBE

RSIC

HT

Architecture & Interior: Concept “Bracket“

Architecture & Interior: Concept “Bracket“

Architecture & Interior: Concept “Bracket“

Architecture & Interior: Concept “Bracket“

Architecture & Interior: Concept “Bracket“

Prototype of Advisory Room

Question 2

WHAT KIND OF DIGITAL DEVICES?

Devices that support the process of financial advisory face to face.

Digital Devices

A multitouch table for profiling and product selection. !   It supports the interactive

process between advisor and client.

Digital Devices

A digital wall to permanently provide overview: ! Timeline ! Agenda ! Structure ! Organization

Question 3

WHAT’S A NATURAL INTERFACE?

An interface that advances !   comprehension ! inspiration

Circle as main navigation element.

Circle becomes a multifunctional biomorph interface element

The Agenda shows up on the video wall

The Agenda shows up on the video wall

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Profiling: Step „Life Situation“

Model 2

NETWORKED FINANCIAL ADVISORY

MY ALGORITHM HAS SOME FINANCIAL ADVISORS

!   I am social. !   I‘m used to information and

interaction online.

Advice is collaboration.

A COMMUNITY OF FINANCIAL ADVICE

!   I can learn about investing !   I manage my plan !   I get input from family, friends

and financial professionals.

Advice is collaboration

Financial advisors

Accountant

Attorney

Spouse

Children

Investment decisions

Tax advice

Estate planning

Goals and finances

College savings

Advice is collaboration

Pete Smith: Jim, I’ve just taken my first job with a 401(k) plan. I’ve shared my retirement plan with you. I know you understand this stuff. Can you have a look?

2012 2022 2032 2042 2052 2062

Pete’s career

Pete’s retirement

Pete’s 401(k)

Advice is collaboration

Pete Smith: Jim, I’ve just taken my first job with a 401(k) plan. I’ve shared my retirement plan with you. I know you understand this stuff. Can you have a look?

Jim Smith [Brother]: You’re doing the right thing 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 into a money fund. Also, you should think about saving for Robbie’s college education, too.

2012 2022 2032 2042 2052 2062

Pete’s career

Pete’s retirement

Pete’s 401(k)

Robbie’s college

Advice is collaboration

Pete Smith: Jim, I’ve just taken my first job with a 401(k) plan. I’ve shared my retirement plan with you. I know you understand this stuff. Can you have a look?

Jim Smith [Brother]: You’re doing the right thing 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 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

Pete’s career

Pete’s retirement

Pete’s 401(k)

Robbie’s college

Advice is collaboration

Pete Smith: Hi, George. My brother Jim said you might be able to help me with investments for my son Robbie’s college.

2012 2022 2032 2042 2052 2062

Pete’s career

Pete’s retirement

Pete’s 401(k)

Robbie’s college

Advice is collaboration

Pete Smith: Hi, George. My brother Jim said you might be able to help me with investments for my son Robbie’s college.

George Jones [Advisor]: Happy to help. You should consider your state’s 529 plan so your contributions will be tax-deductible. Start saving $200 each month, and you can increase it with your raise next year.

2012 2022 2032 2042 2052 2062

Pete’s career

Pete’s retirement

Pete’s 401(k)

Robbie’s college

Robbie’s 529

Advice is collaboration

Pete Smith: Hi, George. My brother Jim said you might be able to help me with investments for my son Robbie’s college.

George Jones [Advisor]: Happy to help. You should consider your state’s 529 plan so your contributions will be tax-deductible. Start saving $200 each month, and you can increase it with your raise next year.

George Jones [Advisor]: Since your son will be entering college in 16 years, I recommend a growth-oriented approach, with a fixed income fund for balance.

2012 2022 2032 2042 2052 2062

Pete’s career

Pete’s retirement

Pete’s 401(k)

Robbie’s college

Robbie’s 529

Advice is collaboration

Pete Smith: Hi, George. My brother Jim said you might be able to help me with investments for my son Robbie’s college.

George Jones [Advisor]: Happy to help. You should consider your state’s 529 plan so your contributions will be tax-deductible. Start saving $200 each month, and you can increase it with your raise next year.

George Jones [Advisor]: Since your son will be 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 started? George Jones [Advisor]: You can open an account online at

2012 2022 2032 2042 2052 2062

Pete’s career

Pete’s retirement

Pete’s 401(k)

Robbie’s college

Robbie’s 529

http://www.myState529Plan.org.  

Engagement is value for the advisor.

SOCIAL FINANCE OPTIMIZES ADVICE

!   I know right away when my client’s plans change.

!   I see their whole financial picture.

!   I have many more opportunities to bring value to the relationship.

Model 3

THE

ALGOVISOR

MY FINANCIAL ADVISOR IS AN ALGORITHM

!   I am mobile and social. !   I accept my data being

collected and used if it serves me.

!   I have no time or motivation to become an expert in investing.

Choices, choices, choices…

Find the best IRA and plan my retirement? See what people are tweeting #SXSW?

SO HOW CAN AN ALGORITHM HELP ME?

By being ubiquitous yet unobtrusive.

Advice is based on data.

AN AUTOMATIC FINANCIAL ADVISOR

!   I don’t want to learn about investing.

!   I don’t have time to manage my plan.

!   I trust the Algovisor that knows more about me than any financial advisor ever would.

“Because investing is very individual and personal”

SO MANY ALGORITHMS ALREADY DO

The advisor needs to know my life, my goals, my finances.

They know more than I would tell my financial advisor.

The all seeing Algovisor

The Algovisor uses MY interface

Sylke, you cancelled your trip to Australia. I am going to move the funds we set aside for that into your xyz account. Okay?

I will allocate the funds according to our current portfolio model. Do you want to review the trades I am proposing before I buy?

Yes

Sure

Great. I sent them to the Algovisor App, along with some details about the individual funds.

OK

Thank you for coming

!   Download slides www.mediaman.net/algovisor

!   Contact Sylke.Laine@mediaman.net

#SXALGOVISOR