Parting Shot continued from page 60
She goes on to say,“ Rather than having a screen tell you,‘ Go buy this chocolate sauce,’ we have a crew member who might suggest,‘ You might like this chili lime seasoning on that vanilla ice cream with a wedge of mango.’”
What Algorithms Miss
What does all this have to do with financial planning, a business that requires more complex interactions than buying cupcakes?
Perhaps the lesson is that even the ways people buy tasty morsels will reveal insights into advisory clients, how we retain them and how we understand( and reinforce) their behavior.
As we integrate more technology into our client interactions, we must ask: Are we using technology to enhance the human connection or to replace it? Are we using digital tools to free our advisors for deeper, more meaningful conversations with clients about their hopes, fears and lives in retirement, or are we merely reducing costs, increasing channel capacity and standardizing experiences?
Just as Trader Joe’ s crew members learn about customer preferences through plain talk rather than loyalty-card algorithms, financial advisors gain their deepest insights into their client relationships by having human-to-human conversations.
Data analytics can help us sort our clients by assets, income and risk tolerance. But the most valuable segmentation comes through meaningful human conversation. Just as Trader Joe’ s crew members learn about customer preferences through plain talk rather than loyalty-card algorithms, financial advisors gain their deepest insights into their client relationships by having human-to-human conversations.
If you take a digital risk assessment, for example, the algorithm might categorize your client as“ moderately conservative.” But only through dialogue can you learn important details— say, that a client’ s parents lost their retirement savings during the 2008 financial crisis, or that they’ re willing to accept more volatility for investments aligned with their values. These insights create opportunities for more personal advice that algorithms simply cannot replicate.
Technology That Enables Human Connection
Forward-thinking advisors don’ t just deploy technology to automate; they use it to enhance human connection. Your client management system shouldn’ t merely track birthdays and asset anniversaries; it should help you recall that a client’ s daughter just started college or that they mentioned wanting to buy a vacation property in the Carolinas within five years.
Videoconferencing platforms, meanwhile, aren’ t just for convenience. They can allow you to“ meet” with your clients during significant moments in their lives— and see their reactions when you discuss their legacy planning or observe their family dynamics in the middle of estate conversations. Client portals shouldn’ t replace communication but instead create space for more meaningful discussions by handling your routine reporting and updates.
When it’ s used thoughtfully, technology becomes the bridge that makes your human connections more frequent, more meaningful and more impactful. The goal isn’ t to replace your expertise and empathy with algorithms but rather to enhance those uniquely human capabilities by removing administrative burdens and getting access to deeper insights that inform more meaningful conversations. This way you build trust, strengthen relationships, earn referrals … and maybe share a cupcake now and then.
Human-centricity doesn’ t mean choosing high-touch over high-tech; it means understanding the right balance. Efficiency is not necessarily engagement.
DR. JOSEPH COUGHLIN is the director of the Massachusetts Institute of Technology AgeLab, and author of The Longevity Economy: Unlocking the World’ s Fastest-Growing, Most Misunderstood Market. Follow him on LinkedIn @ drjoecoughlin.
College Planning continued from page 45
an example, and you’ re married filing jointly, you could put up to $ 10,000 into the plan and deduct that off of your state income tax,” he says.“ And then you literally could take the money out the next day and use it to pay for college.”
And Joseph Messinger, a CFP and director of college planning at Capstone Wealth Partners in Dublin, Ohio, adds two other strategies to consider— self-reimbursement and prepaying private college credits. In the first case, the money in a 529 plan can either be sent directly to a school or parents can use it to reimburse themselves in the same calendar year.
“ Let’ s say you have a bill that’ s come due in August, and you really don’ t want to take the money out of the 529 because there’ s been a drop in the market,” he says.“ You can use cash in August to pay the bill and then reimburse yourself from the 529 later in the year, when hopefully there’ s been some recovery.”
And in the second case, many private colleges, about 300 or so, allow parents to prepay tuition, locking in current rates, which can be a benefit in times of tuition inflation and low market returns.“ So if the student is three years out, and you think tuition costs are going to increase more than the return on investment in the 529, you can buy those credits at today’ s dollars.”
58 | FINANCIAL ADVISOR MAGAZINE | MAY 2025 WWW. FA-MAG. COM