Millennials, AI, Personal Assistants and the Future of Investing: An Interview with GoldBean CEO Jane Barratt

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GoldBean – a robo-advisor service aimed at beginner investors—was part of a recent MoneyScreen study where we focused on the world of personal financial management. That research is detailed in our recent whitepaper, Robo-Advisors vs. Human Wealth Managers: Young(er) Investors hold the Answer.

Intrigued by the offer, we interviewed GoldBean CEO Jane Barratt. We sought out her thoughts on millennials, AI, and personal assistants in the world of investing.

In our MoneyScreen testing of a range of personal finance management offers, GoldBean was #1 with millennials. What unique needs do you think younger people have when investing?

At GoldBean, we understand that for many people, investing can be intimidating. The language, numbers, charts and graphs that are so common in the industry can make people nervous. But we also know that many people want to understand investing and be able to manage and grow their savings themselves. This is especially true of millennials.

We’ve found that millennials are very interested in learning about investing. So at GoldBean we communicate with our clients in a way that is relevant to them. We use plain, simple language and avoid Wall Street jargon. Our website contains a wealth of educational content available to help them better understand key concepts in personal finance and investing. We also have practice portfolios so they can try investing with virtual money. And we build our client’s portfolios to include companies they know and understand.

How do you see the needs of 18-34 year olds changing over the next 5 to 10 years? How will that be different from their needs today?

As we get older, we usually increase our level of savings. We tend to earn more and save a greater percentage of our income. And if we’re investing, the growth of our savings compounds. So the pot of money we save increases over time.

Also over time, investors gain greater experience. They see the ups and downs and better understand how the market works.

For these two reasons, we believe that the millennials of today will probably graduate to more sophisticated investing options. The breadth and scope of their investments will increase, potentially requiring more sophisticated products. It also means that they may need more help with their finances, and many want investment advice. We believe that digitally-enabled advice is the way of the future, and the role of human advisors will evolve alongside the advances in technology.

Younger people have grown up immersed in technology and, as a result, are more comfortable with it—which is reflected in their greater comfort with so-called “robo” advice. But do you think that, if they have the money, they will want to have personal advice too? Or do you think they will remain comfortable with AI-driven advice alone, even as they move toward middle age and larger amounts of investible assets?

We see the growth of the robo-model as an important step in the advisory business. It has definitely democratized investing and brought it to the masses. Recently robo-advice has started to become more sophisticated. The “set it and forget it” model is opening up to more personalized options. That’s what we’re trying to do at GoldBean: personalize advice using a robo-platform.

The key for any advice is making sure the risk level of a portfolio is appropriate, and that the client is comfortable with that risk. With robo-platforms, AI and algorithms are getting more sophisticated, and getting better at finding the appropriate level of risk. And many people are comfortable with the risk level of their robo generated portfolios. This is not true, however, for all clients.

There will always be some who are not comfortable with advice that comes through an algorithm. Those people are much more comfortable with a human advisor. We also find that the need for human advice tends to increase with the size and sophistication of the portfolio. But again, this is not all clients either.

We see AI driven advice as part of the spectrum of investing options that range from a low engagement “set it and forget it” robo-model, to a full service, high engagement human advisor who has discretionary decision making power over a client’s portfolio. We believe AI sits somewhere in the middle.

At the end of the day, money is emotional. Getting the engagement and risk balance right really depends on what the client needs. But we do believe that the more you can engage an investor, the more comfortable they will be.

Companies are pouring quite a lot of resources into intelligent personal assistant type interfaces like Amazon Echo, Google Now, Cortana, Siri and now Amazon Show. How do you think that might change things for types of services available through companies like GoldBean? What might it mean for human advisors?

Digital assistants and voice based interfaces are garnering a lot of attention and dollars right now, and for the financial services industry what they can do has barely scratched the surface.

At GoldBean, we see a lot of potential in the AI applications of digital assistants. Take portfolio building. Why not weave it into everyday life? We are big believers in investing in what you know. And most people know more than they think! If you are a consumer, you are already making critical decisions about companies and the products they sell.

Personal assistant interfaces have the potential to link the consumer side of your life with the investing side of your life. Assistants can give you information about product ratings, prices, and quality, as well as company valuations and stock prices. If they can bridge the gap between the money you spend and the money you invest, they could add a compelling way to generate ideas for your portfolios.

AI virtual assistants can go a long way in filling the gap between robo-products and human advisors.

But—a giant caveat—if companies don’t get the basics right (relevant advice for risk level and engagement where the client is, vs. a ‘one size fits all’ approach), having yet another platform giving generic advice isn’t really that useful.

To learn more about where GoldBean and other robo-advisors fit in the world of personal financial management read our MoneyScreen whitepaper, Robo-Advisors vs. Human Wealth Managers: Young(er) Investors hold the Answer.

Jane Barratt - GoldBeanJane Barratt is the founder and CEO of Goldbean: an online investing platform that helps people start their investment journey with companies and brands they love, know and buy. An advocate for financial literacy, Jane believes that with the right tools and education, anyone can be a confident investor. To learn more visit www.HelloGoldBean.com.