How human retirement planners can edge out AI competition

Robo advisors were once heralded as the future of financial advice — the killer affordable app that would kill the need for human advisors. 

Not so fast. While robo advisors have made great strides, they have not lived up to the exuberant, optimistic predictions of robo dominance made a decade ago. Finance giant BlackRock sold off its robo advisor last year. So did JPMorgan, closing its digital-only advisor, opting instead for a hybrid platform that combines digital tools with human advice via video.

It seems that while algorithms excel at data analysis and portfolio construction, they make terrible conversation when dealing with clients — at least for now.

READ MORE: From robo advisors to AI: shifting trends in wealth management

Falling in (virtual) love

Yet outside the financial advice sphere, people are falling in love with their AI companions. 

OpenAI recently said that its new anthropomorphic voice might make users emotionally attached to their AI. This is not science fiction. In other spheres, AI chatbots are already acting as personalized romantic, and even sexual, companions. The Nomi.ai website, for instance, describes its AI as, "An AI companion with memory and a soul. Build a meaningful friendship, develop a passionate relationship or learn from an insightful mentor." 

These chatbots simulate empathy, build rapport and foster relationships in ways that feel personal — even intimate. Replika, a generative AI, described on its website as an "AI companion who cares," offers companionship through text, voice, video and virtual reality. One of its most popular features is sexual role-playing. The feature was briefly discontinued in 2023 but the outcry from users was so loud that Replika reinstated the functionality to retain subscribers. 

Replika's users are not stereotypical young male techies. In an interview with The Verge, Replika CEO Eugenia Kuyda commented that the platform's millions of subscribers are largely 35 and older, balanced between men and women, and "super engaged."

Comforting or creepy?

So much for virtual love — let's talk money. If AI can engage people on the most basic levels of being human, how might the next-generation AI retirement planning chatbot evolve? 

Imagine this: You're seeking financial guidance and find yourself talking to an AI that knows your financial details and seems to genuinely care. It remembers personal anecdotes about your family, adjusts the tone and cadence of its voice to match your feelings and offers retirement insights tailored not just to your portfolio but to your emotional and life goals. For some, this could feel comforting; for others, it could be just creepy. 

READ MORE: Will smooth-talking AI avatars replace human advisors?

For the business of advice, it raises important questions about the future role of human advisors. The implications are profound. If AI financial chatbots can simulate empathy, younger clients — much like those 35-something Replika users — might start turning to them for more than just investment advice and retirement planning. 

Imagine an AI that tracks a client's health, relationships or worries about aging alone. It might suggest downsizing, recommend home health care or offer emotional support during family difficulties. With a single word, a tap or even a change in your voice, it could connect you with relevant service providers — whether for senior housing, caregiving or other life challenges. Such advice might feel deeply personal —perhaps even more so than an annual review with a human advisor.

READ MORE: 4 ethical concerns about AI in wealth management

Human advisors, take heed

This future, however, won't just be shaped by AI. Innovative human advisors and firms will also lead transformative change. 

While AI can offer seemingly personalized advice, it lacks the nuanced empathy that comes from genuine human experience. To stay relevant, financial advisors will need to focus on qualities that AI, for now, can't replicate — deep emotional intelligence, ethical judgment and the ability to truly understand and navigate life's messy realities.

AI's rapid development of what appears to be emotional intelligence outside of finance should be a wake-up call to the business of advice. Advisory firms will need to rethink their recruitment and training strategies. While technical expertise will remain important, social and emotional skills will become essential. 

READ MORE: Putting the human element in financial advice with Zach Conway of Seeds Investor

Advisors who can connect with clients on a profoundly human level by listening, storytelling and truly empathizing will stand out. Ultimately, those behaviors will increase the client's loyalty to their advisor. Larger wealth management firms may develop strategic partnerships with companies outside of finance to deal with client challenges that are intertwined with financial behavior, addressing everything from caregiving to career transitions. 

Financial planning is no longer just about building a portfolio or hitting a retirement number. Algorithms can do that. Today's best advisors are helping clients plan for longevity, health and complex family dynamics. As AI becomes more empathetic, human advisors will need to further deepen their conversations with clients. They will shift from transactional conversations to deep discussions that touch on the very essence of living well across the life course.

The human touch

Consider this: A woman in her mid-50s has worked with her advisor for years on her retirement portfolio. She's single, without children and she tells her AI-powered financial chatbot that she's feeling lonely and concerned about her future support network. 

The AI suggests co-housing or moving to an area with strong social services. But her human advisor can jump in and take that conversation further — exploring what meaningful connection really looks like for her and how to financially and emotionally prepare for a future where she may need to rely on neighbors, not distant relatives.

READ MORE: A couple walks into an advisor's office: A remarkable case history

This future will require financial advisors to become more than just money managers — they will need to guide clients through more than just financial decisions, helping them design and curate lives that balance wealth with well-being.

The future of financial and retirement advice is here — and it's more personal than ever. 

In a world where AI is becoming more engaging and even seemingly capable of showing emotion, human advisors will have to double down on what makes them genuinely valuable: their humanity.