The College’s mission is to deliver applied knowledge and education, to promote life-long learning, and to advocate for ethical standards for the benefit of society (emphasis mine as I transition to my perspectives on what’s next).

Benefiting society is a noble pursuit that’s more inclusive and welcoming. One way to empower people is through the transfer of applied knowledge across a variety of topics. The College is not content sitting in a stale silo – because the breadth of needed financial knowledge is evolving. It’s not just about product solutions, but also behavioral thought. It’s not just about pen and paper, but also leveraging new technology to improve experiences.

Here are my thoughts on a few areas where The College can leverage its expertise, its industry partnerships, and its learning delivery model to make a real difference in the years ahead.

Listen to the short interview below, and make sure to subscribe to my blog to remain on the pulse of new College initiatives.

From the privacy issues raised by listening systems like Amazon’s Alexa to the growing discussion of Facebook, Twitter, and other platforms’ role in spreading disinformation, society at large is starting to recognize that technology in general, and artificial intelligence (AI) systems in particular, need to be better monitored and integrated into our lives. The financial services sector, for its part, faces a similar reckoning with the rise of robo-advisors: however, choosing to work with AI rather than against it may offer both sides of the financial planning divide a chance to benefit.

Since the earliest days of automation, there has been concern about machines eventually supplanting the jobs humans currently do, leading to not only economic instability but social concerns about surrendering control of our lives. Naturally, this leads to animosity and the sense that machines everywhere are “taking our jobs” and that they must be prevented from doing so. During the 2008 financial crisis, when confidence in the financial services system was severely shaken, several companies arose on the basis of using what they called “robo-advisors”—in actuality, collections of computerized programs and algorithms—that would quickly, efficiently, and dispassionately offer portfolio building to a wide array of clients. The appeal of machine-based advising was attractive to many investors who no longer trusted human advisors to manage their money responsibly, as well as to clients who didn’t have enough assets to attract human advisors looking for high-net-worth clients; in this way, robo-advisors helped democratize portfolio building. But many in financial services attacked the robo-advising model as an overly simplistic system that couldn’t possibly match the nuance, experience, and intuition that make real people so valuable long term. They saw robo-advising as direct competition that was seeking to replace them, and robo-advising firms, for their part, did nothing to dissuade them.

Since then, however, the attitude in the financial services industry toward robo-advisors has markedly changed, based on a realization that is occurring among professionals in various fields: while machines may be able to do certain things better and faster than people, they often lack a “human quality” needed to make wise decisions that may for one reason or another buck traditional logic. Machines just can’t think outside the box like we can (yet); therefore, even though they can and should be used to perform jobs humans can’t accomplish on their own, they require guidance and a human touch to work to their full potential.

The fact is, robo-advisors undeniably provide many advantages to savvy financial planners. They can sort through and process vast amounts of data to make decisions that are more timely and more informed than any human financial advisor could hope to produce. Robo-advisors can also be tailored to specific tasks, from risk management to client goals or investment outcomes, to provide specialized and laser-focused advice in fields like estate planning, life insurance, retirement planning, and portfolio allocation. Above all, they can lower costs to firms that utilize them by offering a cheap and efficient service of high quality that is an asset to any business, as well as cut down on the possibility of human error. It seems many in financial services are beginning to recognize this: according to a 2018 poll, almost 90% of wealth managers surveyed said they viewed robo-advisors positively. A growing number of firms use their in-house robo advisors to perform various tasks like assessing new clients and making financial wealth management recommendations based on a variety of potential situations and factors.

As humans, we’re notoriously slow to accept large-scale change, and this is true both of the robo-advising trend and in the financial services industry. Robo-advisors can help with this by giving wealth management professionals the hard data they need to adapt more quickly to changing financial environments and ensure continued profitability for firms. 
 

AI and Wealth Management: A Mutually Beneficial Partnership

While it’s true that AI technology like robo-advisors may not always be able to offer the flexibility and imagination of human wealth managers, it’s equally true that robo-advisors offer enormous benefits to firms committed to harnessing their computing power. Therefore, the most obvious solution to the robo- vs. human advisor dilemma would seem to be a partnership: just as a human miner could find a new line of work in guiding a mechanical drill, robo-advisors don’t need to compete against traditional wealth management firms when they could instead work together. Once financial professionals begin to consider the benefits of using robo-advisors as part of their operations, the possibilities for helping clients meet their financial goals are endless.

Encouragingly, according to the 2021 Edelman Trust Barometer, business is now the only institution seen as both competent and ethical. That’s right, both competent and ethical. Moreover, business is the most trusted institution of the four studied, which include Non-Governmental Organizations (NGOs), Government, and Media. Remarkably, it is also the only trusted institution with a 61% trust level globally. In 18 of 27 countries, business is more trusted than NGOs (57%), Government (53%), and Media (51%). It is a light of hope in a world too often obscured by mistrust and misinformation. Yet, financial services in particular remains one of the least-trusted industries in business, as measured by Edelman.

Trust is the fuel that enables the financial services industry to effectively provide products and services to clients. If we acknowledge the imperative of trust as necessary for the sustainability of client relationships, I would therefore posit empathy is a main ingredient in that fuel. Companies that brand themselves from a perspective that puts clients’ wants, needs, and dreams before their own, and are able to implement authentic operations to support that brand, are companies that project the image of caring about their clients as humans above all else. The time is ripe for financial services companies to show clients that they “get” them and start to build and sustain trust-based relationships. Demonstrating empathy in those relationships could be one way to get there.

Empathy is a choice to connect with clients. For advisors, this could mean working harder to understand their clients’ feelings, and thereby offer respectful and relevant products and services. In social psychology, the term used to describe the degree of emotional connection between the trustor and trustee is affective trust. Trust is a belief held by the trustor – in this case, the client – in a relationship. Trustworthiness is a characteristic of the trustee, an element of reputation projected by the trustee. Affective trust emphasizes having the trustor’s best interests at heart.

In my review of literature on trust, I discovered some strategies for promoting trustworthiness. When advisors act with care and concern for their clients, they are demonstrating benevolence. Benevolence is a driver of trust and falls under the header of empathy.

Trust has been a topic of research in many disciplines since the 1950s. This has led to a family of trust constructs that are varied and multi-dimensional. While a single, universally-accepted definition of trust does not exist, across disciplines there is widespread agreement that trust is essential for a range of human experiences, including business.

In a study by Sekhon et al. (2014), they posit that the development of trust occurs by focusing on building trustworthiness between the organization and its customers, through utilizing five dimensions of trustworthiness (expertise and competence, communication, concern and benevolence, shared values and integrity, and consistency). Concern and benevolence are jointly the most important factor in the model, as consumers are more likely to perceive a financial organization as trustworthy when the company displays this type of behavior.

Building consumer trust is an opportunity to increase the long-term effectiveness of financial services companies and advance the cause of business ethics. As noted by BlackRock, a global investment manager and technology provider, institutional investors are shifting dollars toward environmental, social, and governance factors as they manage risk at a company. The thinking is that sustainability and trust-based connections to stakeholders drive better returns. Larry Fink, Chairman and Chief Executive Officer, writes, “It is clear that being connected to stakeholders – establishing trust with them and acting with purpose – enables a company to understand and respond to the changes happening in the world.”

An important part of empathy is the ability to trust and be trusted. In my experience working within higher education, one of the research studies I supervised was on the question of what defines high-quality faculty. We categorized these instructors as those who retained and graduated students at the highest levels of excellence. From the study, we learned empathy was the one characteristic that differentiated the highest-performing faculty from all others. We also learned high-performing faculty fueled connection with their students because they built trusting relationships, helping their students navigate academic expectations in the midst of juggling the responsibilities that come with being adult learners, such as full-time work and caregiving for children or aging parents.

Financial services companies might consider the relationship between trust and empathy and executing on strategies that cultivate empathy. A first step could be to follow the examples of companies like JetBlue and Microsoft who, with their empathetic content marketing, have created a connection between clients and their respective brands. As Dr. Brené Brown notes, “Empathy is feeling with people.” It is also about recognizing that connection can make things better.

Nursing scholar Theresa Wiseman, who studied diverse professions where empathy is relevant, wrote about teaching empathy, pointing to the general consensus that empathy is a skill crucial to a service relationship. Inspired by Wiseman’s work, the financial services industry might also consider strategies to cultivate empathetic traits from the inside. Highly knowledgeable and experienced financial advisors could learn to be more empathic.

Empathy is not solely innate. In medicine, for example, studies have shown that physicians can learn to be more empathic to their patients. In turn, their increased empathy also increases patient satisfaction and compliance with treatment recommendations. Moreover, these empathic doctors tended to have patients who showed better treatment outcomes. This would certainly get us closer to what Andrew Bailey noted in his speech: “Trustworthiness demands two things: knowledge and skill; and good intentions and honesty.” Diversity, Equity, and Inclusion (DEI) initiatives could also integrate empathy as a training component.

Where there is empathy, there is trust. For clients to continue to return to companies and discuss sensitive information relating to their finances, developing empathy with those clients may be key to opening the door of consumer trust with the financial services industry. The question is: are financial services companies ready to try?

Domarina Oshana, PhD, is a social scientist and research development professional. She is the Research Director for Corporate Programs for The American College Cary M. Maguire Center for Ethics in Financial Services.

Properly aligned and applied AI can help wealth management firms adapt to changing client needs and face the competitive challenge posed by fintech companies. The American College of Financial Services is here to help with a robust resource center built to answer your pressing questions.

Visit this page to get instant access to an in-depth white paper, infographic advisor action plan, and an audio interview series with College thought leaders – hosted by fintech experts Joel Bruckenstein and Bill Winterberg.

You can listen below to my interview with Joel Bruckenstein, CEO of T3 Consulting Services.

Joel Bruckenstein is the head of Technology Tools for Today (T3) and an internationally recognized authority on applied technology for financial professionals. He also produces the T3 Advisor Conference, the premiere technology conference for independent financial advisors.

Bill Winterberg is the founder and president of FPPad.com and is widely known as an independent expert on technology in financial services. He has been recognized for his work by many top industry publications, including InvestmentNews and Investment Advisor Magazine, and hosts the weekly video series “Bits and Bytes” on technology news and information for financial professionals.

With nearly 40 years of combined financial services and technology experience between them, Bruckenstein and Winterberg were perfect fits to host discussions on the intersection of AI and wealth management with key figures from The College’s team of industry thought leaders. In our series of audio interviews, you’ll hear from:

• George Nichols III, President and CEO
• Michael Finke, PhD, CFP®, Professor of Wealth Management and Frank M. Engle Chair of Economic Security Research, WMCP® Program Director, and Director of the Alfred Granum Center for Financial Security
• David Blanchett, PhD, MSFS, CFA, CLU®, ChFC®, CFP®, Adjunct Professor of Wealth Management and Head of Retirement Research at Morningstar Investment Management
• Hilary Fiorella, Executive Director of the Center for Women in Financial Services
• Azish Filabi, JD, Associate Professor of Ethics and Executive Director of the Cary M. Maguire Center for Ethics in Financial Services
• Sofia Duffy, JD, CPA, Assistant Professor of Business Planning, and Assistant Vice President and Director of Regulatory Compliance

Aside from my attraction to history, the payoff from this framing comes in Woodson’s profound words at the time of Negro History Week’s launch in 1926, when he said, “If a race has no history, it has no worthwhile tradition, it becomes a negligible factor in the thought of the world.”

That history is full of hard truths – ugly, divisive ones that must be presented not from the prism of the oppressors, but by those who suffered from such oppression. It's only in the unvarnished realities of past transgressions that we can truly appreciate, and celebrate, the progress America has made.

Major inflection points – the Emancipation Proclamation, Brown vs. The Board of Education, Rosa Parks on the bus, Dr. King’s “Dream”, the Civil Rights Act of 1964 – are bronzed amidst the cathedral halls of America's history; though any guided tour is still far too short, and leaves you feeling that there’s so much work left to do.

That’s because there is.

Black History Month is a time to reflect, re-engage (or engage for the first time) with the Black community, and re-energize ourselves for the marathon ahead. Each year, as I listen and watch the stories, and remember my upbringing in the 1960s Segregated South, I measure my capacity to affect change, where my words or deeds could do the most good.

Following the death of George Floyd last May, I wrote these words that came from a place of pain – but also one of passion and purpose to achieve sustainable, generational change. It’s not lost on me that I’m a Black President and CEO of the nation’s oldest, most storied institution serving a predominantly white financial services industry. I understand that I have a unique platform to voice concerns and provide perspectives. Yet, those perspectives, and that platform, only carry power if operationalized to work with the industry, inspiring leaders with conviction, not condemnation.

I’m a Black man who grew up with very little, yet opportunities afforded me by white mentors and sponsors opened avenues to fulfill career aspirations and provide for my family. I’m forever thankful – but I’m not a prodigy; there are countless others eager for similar opportunities to make a difference and demonstrate their expertise.

I believe sustainable, generational change in Black communities comes by identifying the root cause of pervasive wealth inequality and pinpointing the tangible, community-focused solutions needed to narrow the racial wealth gap. The American College Center for Economic Empowerment and Equality sees this gap as a matter of economic justice – where underserved communities have equal opportunities to prosper and live a fulfilling life as they define it.

The wealth disparity is real, and it’s significant. The Black community has faced institutional barriers to financial security and wealth for decades, leaving a massive gap between those benefiting from the current system, and those being left behind. I believe the right solutions integrate community needs with business goals (working with not around the financial services industry). Financial services, alongside nonprofit organizations, government agencies, and broader corporate America, must view the Black community as an investment, and focus on “doing well by doing good.” And that starts by humbly meeting Black America where it is – in a tenuous position on America’s financial food chain, understanding its concerns, embracing its communities, and coming together to develop the products and services needed to make change last.

With this construct, I believe the marathon will hit important mile-makers – those milestones that strengthen the successes standing alongside the necessary truths of past transgressions. During Black History Month, I'll again measure my capacity to affect change – but this year, I’ll do it in part through The College’s Center for Economic Empowerment and Equality. This Center – the only of its kind in financial services – aligns with The College’s mission and our vision for the future.

We can leverage our relationships with all financial services sectors, a growing number of community and private foundations, governmental contacts, and corporate executives to write a new chapter in the history books: Sustainable, Economic Change for Black America.

And we’ll do it together.

Yet, Williams’ journey to the wealth management firm specializing in investments, insurance planning, and financial planning took a far more circuitous route – aspirations that came with a prestigious collegiate golf career at Auburn, a victory that vindicated the lengthy days spent “rounding the edges of the circle,” as his swing coach liked to preach, a taste of competition at the pinnacle of the sport on the PGA Tour, and a chronic back injury that required a dramatic course-correction.

Williams’ win at the Web.com Tour’s 2012 Mexico Open – at a golf course in the central Mexican state of Guanajuato, some 1,550 miles from Alexander City – was metaphoric of the nomadic journey many professionals take with the game, a suitcase-and-continental-breakfast lifestyle required to chase the dream.

Reaching the winners’ circle led to PGA Tour status – a card Williams held for two seasons, before his journey was derailed by a bad back that limited his ability to play without pain.  

From One Beginning to Another 

Williams never put pressure on himself as a junior player, understanding it was just the first step in his golfing career. That perspective – underlying his immense skill and drive – helped him land a golf scholarship at Auburn, where he earned three-time All-American status and helped the Tigers capture the 2002 SEC championship.

Ten years later, he lifted the trophy on the Web.com Tour, and with it shook off the immense pressure that came with carving out a sustainable golf career. Yet, just months later, he felt a twinge in his back following a gym session at an event in Knoxville, Tennessee. What started as nagging pain grew sharper, more persistent, and eventually chronic.

Despite his best efforts on the PGA Tour in 2013 and 2014, Williams’ physical limitations curbed his ability to compete, and after taking a major medical exemption in 2014, he left the game he’d pursued since childhood.

Despite this, Williams never considered himself to be at a crossroads. He took his studies seriously at Auburn, earning accolades as a two-time Academic All-American with a degree in Economics. “That balance between golf and school was a crash course in time management,” Williams said. “It also meshed with my mentality to be the best I could at everything, giving energy and effort on the course and in the classroom.”

Williams parlayed his academic accomplishments and affinity for finance into an opportunity as a financial advisor.

“I always had something else other than golf that I enjoyed,” Williams said. “So, I naturally jumped at the opportunity to transition to a career in financial services.”

Williams approaches the business, and the value he provides to his clients, with the same mentality that he approached his career hitting fairways and greens. “It’s all about creating a network of peers to grow your skills and forging relationships with your clients, understanding their needs, and then honing my skills to meet those needs,” he said.

His client-first mindset is rooted in his experiences at the Walker Cup, a team amateur competition between the United States and Great Britain and Ireland. Williams played on two teams alongside current PGA Tour players Bill Haas, Ryan Moore, J.B. Holmes, and Bryan Harman.

“Golf is an individual sport, except in these team events, where it’s about something far bigger than you,” Williams noted. “In financial services, it’s the same way. It’s not about you, it’s about your clients, their family, their business, their legacy. It’s an immense and humbling responsibility.”

How The College’s WMCP^® Program Changed The Game 

Williams is accustomed to taking advantage of opportunities – a fortuitous bounce off a tree into the fairway during his golf career, and an open invitation to take The American College of Financial Services’ Wealth Certified Management Professional® (WMCP®) program to expand his applied knowledge.

“I got an email from Ameritas Growth Leaders (AGL) – a study group for financial professionals in their first decade in the business, and Ameritas was offering to pay for our continued education through The College’s WMCP® program. They wanted to invest in me, and I wanted to invest in myself and my clients,” Williams said.

After doing his due diligence, Williams was sold. “I liked everything I saw – the program offers an expansive view of wealth management that’s more than portfolios; it’s managing accounts, tax issues, and estate planning. I was ready to go,” he said.

Despite running into a testing delay due to the COVID-19 pandemic, Williams is now a Wealth Management Certified Professional®, growing his skills in “tax management and a whole lot more.”

“I learned so much about putting certain investments into certain accounts for tax efficiency,” Williams said. “I now grasp estate planning at a foundational level, and I understand its value. I’m now connected to an estate planner and sit in those meetings with my clients. I’ve identified greater growth and value possibilities that truly enhance the potential for greater client outcomes and business growth.”

As Williams looks to the future, he holds his WMCP® credential proudly – just as he held that trophy in 2012. It’s indicative of the beginning of a new career journey, one that brings him great pride and satisfaction.

“I like to follow Wayne Gretzky’s words, ‘I skate to where the puck is going, not where it’s been,’” he said. “Just building portfolios is the past, but WMCP® has set me up to expand my expertise and my services now and in the future.”