I get asked a lot about the future of the writing profession, given the obvious potential of AI technology to replace people like me. I have two answers, because there are two kinds of writing.
The first covers original reporting in journalism and creative writing. There will be a place for both in the foreseeable future, no doubt. The former plays a fundamental role in a liberal democracy. The latter meets a deep-seated need we all have for people’s stories.
The second covers what I call functional writing — media releases, white papers and the like. I expect that kind of work to be automated before my career is over (which is to say in the decade ahead). If you disagree, ask yourself how often you look for an author’s name before reading something.
I recognize that there is a lot that falls into the cracks between those two categories. Ad copywriting has long been a highly creative exercise, for example. My hunch though, is that a lot more assignments will end up in the functional category than my fellow writers would like.
Turns out there are two kinds of wealth management as well. A report released this month by McKinsey & Company says those focused on delivering outputs will see their businesses jeopardized by AI. Those focused on outcomes will do better.
The report’s authors lay out a pair of additional conclusions: AI will automate scenario planning and other document-heavy tasks. And the advisor role — to the extent it’s focused on judgment and client coaching — will remain intact.
“For years, the wealth management story has relied on three beliefs: that advice is constrained by the number of licensed professionals, that planning is labour-intensive and that trust and compliance create barriers to automation,” the report reads. AI and robo-advice put each of those assumptions to the test.
The AI opportunity for wealth management firm leaders is to automate the processes behind the advice, not the advice itself. Executives need to be clear-eyed about the difference.
“There is no doubt that AI will aggressively assume specific tasks,” according to the report. “However, to say that AI will make the leap from automating tasks to replacing the job itself is a significant overstatement. Especially in the high-net-worth and ultra-high-net-worth segments, the true product is not the spreadsheet but accountable judgment and behavioural coaching.”
As specific services become undifferentiated from firm to firm, McKinsey says there will be intense pressure to lower prices. But, “the fear of an immediate, industry-wide fee-freefall is likely overstated.”
Client experience will win the day. Firms that deliver on rising expectations will continue to add value that robo-advisors and other digital-first providers can’t.
Investors are looking at all of this with keen interest, McKinsey reports. “Wealth management is now experiencing its version of SaaSpocalypse,” the report reads. That’s a reference to the beating software-as-a-service companies have taken as AI emerged as an existential threat to their business models.
I asked Ju-Hon Kwek, a senior partner and global co-leader of the wealth and asset management practice at McKinsey in New York, if AI’s impact will be the same north and south of the border.
“The U.S. wealth management industry is more fragmented, more segmented and more independent-advisor driven,” he said in an email. “Canada’s is more concentrated around major banks and their dealer networks. So, it’s possible that these differences in industry structure translate into a faster, more uneven and more competitive AI rollout in the U.S., versus a more centralized and more institutionalized rollout in Canada.”
He anticipates more “top-down AI deployment” here.
Canadian wealth managers have maintained healthy valuations, thanks largely to robust equity markets. Scale remains the focus, and there’s no reason to believe AI will dampen interest in merger-and-acquisition activity in the industry. On the contrary, it aligns with the ability of large organizations to invest in technology.
While we’re on the topic, here’s our policy. We use AI tools, for research and editing primarily. There is a member of my team at the beginning and end of any process involving the technology. No AI slop here.