As with most areas of our lives, the financial services industry is moving toward automation and away from human interaction. In a race to improve operational efficiency, financial services firms are embracing concepts like “intelligent automation,” “robotic process automation” (RPA) and “strategic automation investments.”

Automating processes and using models can make good business sense in some ways; however, it does not provide the bespoke experience we believe our clients should have.

Technology Should Enhance, Not Replace, Our Relationships

Technology is certainly a powerful tool in any business when we harness it to improve accuracy, keep track of clients’ information and streamline processes. Robo-advisors use sophisticated algorithms to calculate potential returns on investment, for example.

However, too often firms implement technology in ways that lower the quality of service they provide to their clients. Building personal relationships with clients has always been the foundation of the service we provide. That will never change, no matter how sophisticated technology becomes.

The key is to use technology to enhance our relationships, not to replace them.

According to Wired, a monthly magazine specializing in the way technology changes our lives. We must be “thinking conversation first, technology second…” Wired authors envision a world in which companies “create a human/hybrid intelligence.”

For a 2022 Vanguard Group report, researchers surveyed households with at least $100,000 in investable assets that used human advisors, robo-advisors or both. They found that clients of human advisors were more satisfied with the overall service they receive compared to clients of robo-advisors. Also, these clients perceived their human advisors to offer more value in three specific dimensions: portfolio value (i.e., optimal portfolio construction and client risk-taking), financial value (i.e., attainment of financial goals) and emotional value (i.e., financial confidence).

Like the authors of the Wired article, the authors of the Vanguard study also stressed that financial advisors can leverage technology to improve some processes, while some aspects of engaging with clients should remain in the realm of a traditional, non-automated relationship.

For example, the highest-ranked functions for which clients preferred human advisors included feeling understood, having a connection/relationship and having advisors work in their best interests and be empathetic to the client’s needs. In contrast, the areas for which clients preferred digital tools included simplifying their portfolios, diversifying their investments, managing capital gains and taxes effectively, and preventing details from being overlooked.

Only 4 percent of clients of human advisors said they would switch to a robo-advisor if they had to leave their current advisor.

At Carver Financial Services, we are dedicated to creating a more personalized experience while many other firms seem to be moving in the other direction.

We are also seeing a prevalence of firms and advisors using investment models for their clients, rather than designing custom solutions.

In many cases, models use automated questionnaires to determine clients’ basic levels of risk tolerance and broad goals. These models can serve as a starting point, but they should not replace critically important human interaction.

Models and robo-advisors can crunch numbers, but they cannot replace the valuable intuition, compassion and empathy you will receive while working with an experienced advisor regarding your individual situation. Your advisor’s experience, education and knowledge will always surpass that of automation when guiding you within the context of your unique circumstances regarding income tax, outside investments, fears and concerns, upcoming life transitions, and personal beliefs and values.

Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Randy has more than 32 years of experience in the financial services business. Carver Financial Services, Inc. was established in 1990 and is one of the largest independent financial services offices in the country, managing $2.2 billion in assets for clients globally, as of December 2021. Randy and his team work with individuals who are in financial transition as a result of divorce, retirement or the sale of a business. You may reach Randy at randy.carver@raymondjames.com.

The information contained in this post does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

Returns are based on the S&P 500 Total Return Index, an unmanaged, capitalization-weighted index that measures the performance of 500 large capitalization domestic stocks representing all major industries. Indices do not include fees or operating expenses and are not available for actual investment. The hypothetical performance calculations are shown for illustrative purposes only and are not meant to be representative of actual results while investing over the time periods shown. The hypothetical performance calculations are shown gross of fees. If fees were included, returns would be lower.

Hypothetical performance returns reflect the reinvestment of all dividends. The hypothetical performance results have certain inherent limitations. Unlike an actual performance record, they do not reflect actual trading, liquidity constraints, fees and other costs.

Also, because the trades have not actually been executed, the results may have under- or overcompensated for the impact of certain market factors such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. Returns will fluctuate and an investment upon redemption may be worth more or less than its original value. Past performance is not indicative of future returns. An individual cannot invest directly in an index.

It’s no secret that retirement is a time for significant change, and this means different things for different people. For many, retirement is a time to leave the workforce and enjoy life on their own terms. But retirement isn’t just a one-time event — it’s a lifelong process that requires prior planning and specialized knowledge.

In some ways, planning for retirement is like planning the ultimate vacation. You need to figure out where you want to go, when you want to go and what you want to do when you get there. However, vacations come and go, but retirement is a once-in-a-lifetime event. Getting it right is crucial to your future well-being.

Once you’re in retirement (or on vacation), both opportunities and challenges will arise that you could not have foreseen. Those unexpected detours can be fun for some and a challenge for others.

Retirement is always one of the most pressing concerns people have as they begin to see this life stage on the horizon. It is even more worrisome during times like we’re experiencing now, when fear of recession looms ahead and disrupts the stock market.

There are several key things you can do to make the most of your retirement years. Here are two key tips to get you started.

1.  Work with an Experienced Guide (Advisor)

Imagine that you are visiting a country for the first time. You might discover that no matter how much research you did, it’s a challenge to experience the adventure from a local’s perspective. You find that you’re so stressed about navigating the roads, language and culture that you are unable to enjoy your trip. Now imagine that you hire an experienced tour guide to show you around. He or she knows things you could never learn on your own, knows where to go and does all the driving for you. Now you can truly enjoy your trip!

It’s the same way with retirement — only with retirement, having a guide is infinitely more crucial. You retire only once in your lifetime. Mistakes can cost you dearly and can affect your quality of life once you stop working.

According to the Employee Benefit Research Institute’s 2022 Retirement Confidence Survey, only 28 percent of respondents said they were “very confident” they would have enough money for a comfortable retirement. You can increase your confidence significantly by working with an experienced advisor.

I strongly encourage you to work with an experienced fiduciary financial advisor to guide you through retirement. People retire only once, so they are retiring for the first time. When was the last time you did anything perfectly the first time? We have helped thousands of people in all different types of financial situations retire successfully. Just like a tour guide in a foreign country, we have been navigating the complexities of retirement for decades — from optimum use of investments to riding out an economic downturn to handling complex tax issues…and everything in-between.

2.  Start Planning as Early as Possible

When most individuals think about retirement, they imagine a day when they no longer have to go to work. They picture themselves waking up late in the morning, having breakfast and then spending the rest of the day doing whatever they please. While this may be the case for some retirees, for most, it is just the beginning of a new chapter in their lives.

Retirement is a lifelong process that requires planning and preparation. There are many things you need to consider before making the leap into retirement, such as your finances, health and lifestyle. To make the transition as smooth as possible, it is important to start planning for retirement well in advance. By taking the time to plan ahead, you can ensure that your retirement years are more enjoyable and fulfilling.

The earlier you begin saving up your nest egg for retirement, the more you benefit from time and compound interest. That isn’t the only thing you need to think about, however. We encourage you to view retirement as a lifelong process of gradually transitioning into a new stage of life, and that requires planning as well.

If you want help creating a plan that will simplify your life while enhancing your retirement experience, contact us today. We will work with you to create an individualized strategy based on your unique needs and goals. Of course the numbers are important, but retirement is about so much more. We want to help you explore what you would like to do in retirement and then design a financial plan that will help you get there. We will work with you to adjust that plan as your life circumstances change.

We are here for you. We will handle the details and complexities of retirement so you don’t have to worry about them. Instead, you can enjoy spending your time with those you love, doing the things you love. Remember, time is the most important currency, not money. We will help you manage your money so you can enjoy your time. Not only have we guided thousands of people through retirement, we are passionate about this stuff!

Having a guide will increase your confidence and your ability to enjoy the journey. On that tour of the foreign country with an experienced tour guide, you won’t have to worry about anything. Your guide will take you to all the best local hangouts, tell you interesting folklore you won’t find on the internet and avoid the dangerous areas you might not be aware of. The guide will maximize your experience and minimize your risk. We do the same with your retirement! Please don’t take the DIY (do-it-yourself) approach to retirement. You have only one chance to get it right. Allow us to guide you.

Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Randy has more than 32 years of experience in the financial services business. Carver Financial Services, Inc. was established in 1990 and is one of the largest independent financial services offices in the country, managing $2.2 billion in assets for clients globally, as of December 2021. Randy and his team work with individuals who are in financial transition as a result of divorce, retirement or the sale of a business. You may reach Randy at randy.carver@raymondjames.com.

The information contained in this post does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources

considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

Returns are based on the S&P 500 Total Return Index, an unmanaged, capitalization-weighted index that measures the performance of 500 large capitalization domestic stocks representing all major industries. Indices do not include fees or operating expenses and are not available for actual investment. The hypothetical performance calculations are shown for illustrative purposes only and are not meant to be representative of actual results while investing over the time periods shown. The hypothetical performance calculations are shown gross of fees. If fees were included, returns would be lower.

Hypothetical performance returns reflect the reinvestment of all dividends. The hypothetical performance results have certain inherent limitations. Unlike an actual performance record, they do not reflect actual trading, liquidity constraints, fees and other costs.

Also, because the trades have not actually been executed, the results may have under- or overcompensated for the impact of certain market factors such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. Returns will fluctuate and an investment upon redemption may be worth more or less than its original value. Past performance is not indicative of future returns. An individual cannot invest directly in an index.