Presentation Title

The Importance of Human Interaction in Financial Planning

Start Date

November 2016

End Date

November 2016

Location

Watkins 1117

Type of Presentation

Oral Talk

Abstract

The present project examined the differences between person-to-person financial services and online, algorithm-driven financial advice programs. Human interaction and the formation of relationships are a vital part of an individual’s existence as described by Abraham Maslow. This idea is relevant in the business world where technology is replacing human-to-human interaction; however, technology is insufficient in providing the support that humans can provide. A survey of 42 respondents was conducted which included questions about an individual’s need for human relationships and which portfolio would suit the individual best. Results showed that over 70% of Millennials prefer a human adviser due to factors such as the need to speak to another person during life-changing events, the role emotions play in one’s actions, and the portfolio's diversity level. The investigation then created a simulation of twenty hypothetical clients, submitted the characteristics to three leading financial service websites, and compared these results to the advice of a personal service adviser. The results showed that the online websites’ portfolio recommendations differed from service to service for the same characteristics, resulting in potentially different outcomes. After interviewing a financial adviser about the simulation results, as well as the websites’ questioning methods, a list of portfolio planning components was piled. Each website placed emphasis on different demographics of the client, as opposed to accounting for all necessary factors equally. In order to have a well-rounded portfolio, most, if not all, of the necessary aspects of the client must be understood. In conclusion, this study indicates likely limitations of online financial planning.

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Nov 12th, 2:00 PM Nov 12th, 2:15 PM

The Importance of Human Interaction in Financial Planning

Watkins 1117

The present project examined the differences between person-to-person financial services and online, algorithm-driven financial advice programs. Human interaction and the formation of relationships are a vital part of an individual’s existence as described by Abraham Maslow. This idea is relevant in the business world where technology is replacing human-to-human interaction; however, technology is insufficient in providing the support that humans can provide. A survey of 42 respondents was conducted which included questions about an individual’s need for human relationships and which portfolio would suit the individual best. Results showed that over 70% of Millennials prefer a human adviser due to factors such as the need to speak to another person during life-changing events, the role emotions play in one’s actions, and the portfolio's diversity level. The investigation then created a simulation of twenty hypothetical clients, submitted the characteristics to three leading financial service websites, and compared these results to the advice of a personal service adviser. The results showed that the online websites’ portfolio recommendations differed from service to service for the same characteristics, resulting in potentially different outcomes. After interviewing a financial adviser about the simulation results, as well as the websites’ questioning methods, a list of portfolio planning components was piled. Each website placed emphasis on different demographics of the client, as opposed to accounting for all necessary factors equally. In order to have a well-rounded portfolio, most, if not all, of the necessary aspects of the client must be understood. In conclusion, this study indicates likely limitations of online financial planning.