The complementary responsibilities of advisers and their tech in an increasingly automated advisory landscape.
What is required for advice to be suitable?
Advisory firms tend to have a well-rehearsed answer to this.
“Consider X, Y, and Z. Account for A, B, and C. Ensure potential consequences P and, if applicable, Q, are adequately understood…”
Maybe, if they’re put on the spot, a quick flick back to the regulations or their internal ops manual is all that’s needed to check they’ve covered everything.
But something’s often missing. Something that’s revealed by a simple question:
Are we talking about one adviser giving one client one recommendation, or 100 advisers giving 10 recommendations each to 10,000 clients?
The process required for the two is very different. A doctor acts one way in an emergency on an aeroplane and another in the steady routine of a hospital. The expertise is the same, and the broad strokes of diagnosis, prescription, and implementation are the same, but the precise steps and responsibilities differ in crucial ways.
In a one-off situation, the adviser is responsible for everything: understanding the client, assessing the options, and choosing how best to present them. Their training and experience, coupled with their intuitive pattern-matching and hand-holding skills, will usually lead to a good-enough outcome.
However, advisory relationships today are rarely limited to single transactions. Over a longer course, and across a client base, consistency becomes key. As we’ve shown in our work on ‘noise’ in financial advice, what is deemed suitable can differ depending not only on which adviser within a firm a client speaks to, but also on the prevailing mood of that adviser.
Many, though certainly not all, of the components that contribute to suitable advice are, if they’re to be delivered consistently, better supported by a digital helping hand. But how should an advisory firm divide up its labour?
Diagnosis and prescription… and beyond
A good starting point is to think of the distinction between diagnosis and prescription. Diagnosis demands consistency: the same inputs must yield the same outputs, free from the unwitting whims of human mood. It’s a job for a machine.
In complex situations that require comparisons across large populations, or calculations (for risk tolerance, risk capacity, behavioural capacity, or the suitable risk level that combines them), an accurate digital tool is clearly the best bet for delivering a consistent diagnostic baseline and minimising arbitrary and unwelcome variation. It also automatically captures the evidence supporting each recommendation.
In behavioural reality, even when the diagnosis points clearly to the ‘right’ financial answer, that answer is often an aspirational target. The adviser’s job is to help the client edge toward it – perhaps slowly, perhaps never fully – without sacrificing emotional comfort along the way.
A good prescriptive process is more suited for a human, involving as it does mathematically insoluble trade-offs, and the messy emotional search for comfort. Merely pointing towards the path that’s the best fit for a client is only half a job. Someone – and here it’s better that it is a someone, rather than a something – still needs to help that client understand why it’s the best path for them, and to keep them comfortable as they proceed along it. Emotional comfort is not the enemy of good advice – it is a precondition for clients to act on it. This calls for more than a calculator, even a really fancy one.
It's clear that suitable advice needs both stages to function well. But more than that, they need to function complementarily. This requires more than silo-ing the stages of the advisory process and handing the calculations to algorithms, and the judgement calls to the advisers.
The key is recognising that every stage of the advisory process works best as a team effort, and it’s the types of task, rather than where they sit in that process, that determine how responsibilities should be assigned.
To take perhaps the most obvious example, the adviser’s role as face-to-face ‘behavioural coach’ or expert sounding board is understandably the one most commonly heralded as irreplaceable by an algorithm. Technology can still assist in this coaching role: an advanced financial personality assessment can aid advisers by crunching the data behind the scenes and suggesting not only what to say, but how to say it, based on potentially hundreds of thousands of interactions with similar personality signatures in similar situations. It’s no denigration of the pianist that they play from a score.
Bridging diagnosis and emotional comfort
The divide between diagnosis and prescription becomes most visible where the financially suitable recommendation feels emotionally uncomfortable. The family home offers a clear example: owning it increases financial resilience and therefore capacity for risk, yet the emotional attachment to it means many investors exclude it from planning, even if that makes it more likely they will one day have to sell it. Similarly, many clients struggle either to deploy excess cash or to resist the urge to panic sell when markets turn volatile. People do not panic sell because it is secure, but because it feels secure. In all these cases, good diagnosis identifies what should be done; good prescription helps clients feel comfortable enough to do it.
From a diagnostic perspective, recognising such factors is essential to determining the suitable level of risk that should be taken. The diagnostic process must provide a consistent, objective baseline – an unbiased recommendation of the financially right answer. But the prescriptive process is different: it’s about helping clients move towards this ideal gradually and sustainably, turning intention into action without sacrificing emotional comfort. Advisers must bridge this gap, recommending the suitable level of risk while guiding clients toward it. The journey to the recommendation is as important as the recommendation itself. Don’t just present solutions – help clients get there.
As in medicine, getting the diagnosis right requires precision tools and consistent methodology; the prescription, though, is an art that must adapt to human realities. You don’t want guesswork: if you need blood tests, you should want blood tests; if you need an MRI, you should want an MRI. But once the diagnosis is clear, decisions about treatment – whether to delay, proceed, or adjust – depend on personal context, values, and readiness. The same is true for financial advice: consistent, data-led diagnostics provide the foundation, but the human conversations around timing, comfort, and trade-offs determine whether clients follow through.
The best of both worlds
Advances in automation have altered the role of the adviser, but they’re a long way from displacing it. Well-designed decision-support tools empower advisers to engage clients more consistently and effectively. These tools act as decision prosthetics, tools that support but never replace human judgement, helping advisers be the best versions of themselves.
Get this teamwork right, and the benefits are obvious:
- more accurate diagnosis through data-driven assessments;
- more consistent advice by minimising adviser ‘noise’ in areas humans struggle to work reliably at scale;
- more efficient time and resource use as tech crunches numbers while advisers hold hands;
- more comfortable investors thanks to personalised digital nudges improving decision-making over the journey; and
- greater client retention from personalisation-driven differentiation opening up opportunities for increased conversion and referrals.
Diagnosis should be data-led, objective, and consistent; prescription must be human, emotional, and flexible. Suitability demands both – the precision of science and the empathy of art.
