I fancied myself as a bit of a chess player during my school days. I wasn’t exactly a grandmaster, but I took part in county-level tournaments. As was deemed cutting-edge back then, I sometimes practised with an electronic chess set.
The youngsters of today would doubtless find that set hilariously primitive. I would guess it had a RAM of about two kilobytes and a processing speed of approximately two megahertz – spectacularly puny figures by today’s standards.
Yet the fact is that it helped me become a better player. In its own humble way, it taught me stuff I didn’t know. It allowed me to work on my weaknesses and come up with more effective tactics.
I often cast my mind back to that simple little device when I hear financial advisers complaining about the march of technology. I can’t help thinking that many of these doom-mongers are still missing the point of the amazing advances we’re now witnessing in our industry.
Their scepticism essentially stems from a belief that the power of tech – as most obviously encompassed in artificial intelligence (AI) – is now so awesome, so superior to anything a human might muster, that there may soon be nothing left for them to do. In my opinion, this view could hardly be more mistaken.
To begin explaining why, let’s briefly consider a chess game rather more momentous than my own efforts of 40-odd years ago. Let’s wind back to 1996 and the historic clash between world champion Garry Kasparov and IBM’s “supercomputer”, Deep Blue.
Famously, Kasparov lost the opening game. It was the first time a computer had beaten a world champion under “normal” chess-playing conditions. The maestro was less than impressed and immediately accused IBM of cheating.
The basis of his gripe? He simply couldn’t accept a computer had been responsible for the pivotal move that swung the encounter in Deep Blue’s favour. He said one of his fellow grandmasters must have been lurking behind the scenes, feeding tips to the IBM team.
It has since been argued – and essentially proved – that Kasparov genuinely missed a trick, leaving Deep Blue to capitalise on his slip-up. He won the series 4-2, but Deep Blue narrowly took the overall honours when they met again the following year.
So even nigh on 30 years ago, when AI was still in its comparative infancy, the best machine was more than a match for the best human. And that trajectory, like it or not, has continued ever since.
Let’s briefly switch to a different boardgame, Go, which was invented in China around 2,500 years ago. In 2016, in another much-hyped encounter, leading player Lee Sedol took on AlphaGo, a program developed by Google’s DeepMind division.
In the second game of the series, on its 37th turn, AlphaGo made a move no-one had ever seen before. Normally known for his rapid responses, Lee felt compelled to sit and reflect for around a quarter of an hour.
He eventually concluded AlphaGo had made an error. He was wrong. AlphaGo won the game and claimed the series 4-1. That groundbreaking move has since been credited with transforming how humans play Go.
Like Kasparov, Lee was far from delighted. He quit professional play in 2019, bemoaning what he saw as the invincibility of AI – a phenomenon he branded “an entity that cannot be defeated”.
The pessimistic interpretation of all this is that computers will put us out of work, supplant us in almost every conceivable way and probably enslave us for good measure. Broadly speaking, this is the outlook of the technophobic advisers I mentioned earlier – and perhaps of Kasparov and Lee, too.
By marked contrast, the optimistic interpretation is that we shouldn’t fear the ongoing rise of artificial intelligence. We should instead embrace the opportunities made possible by augmented intelligence. This is my outlook.
What do I mean by “augmented intelligence” in the context of financial advice? I mean the enormous scope for advisers to use tech to their advantage – to appreciate when it can do the “heavy lifting”, save time and resources, provide fresh insights and benefit clients.
It’s really a question of synergies. It’s about realising that there’s more than one way to tackle a challenge and that advisers and AI can make for a fantastic combination if their talents are used in tandem.
Don’t just take my word for it. Interviewed on the 20th anniversary of Kasparov’s 1997 loss, Murray Campbell, a member of the IBM team that created Deep Blue, stressed how the respective problem-solving approaches of humans and machines should complement each other.
“That’s definitely true in chess but also in many real-world problems,” Campbell told Scientific American. “Computers and humans together are better than either one alone.”
Ultimately, as members of the adviser community, we have every chance to make tech work with us rather than against us. Used appropriately, it can be a tremendous ally. We just need to recognise what tech does well, what we do well and, by extension, what each does better than the other.
This, too, reminds me of my school days. I have to confess that my electronic chess set occasionally thrashed me – but I was the only one who could put the pieces back in the box afterwards.
Andrew Goodwin is co-founder and CEO of Truly Independent and the author of ‘The Happy Financial Adviser’.
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