The rapid advance of AI-enabled financial planning software has led many advisory firms to wonder whether they still need to hire entry-level planners. With tools now able to turn a client’s spreadsheets and PDFs into a detailed financial plan in a matter of minutes, handing off the work traditionally given to new planners can look like an easy decision, particularly for a profession that already struggles to find talent. Yet there are several reasons to believe that firms that pull back from hiring new planners may end up worse off.
In this guest post, Daniel Yerger, founder and owner of the RIA MY Wealth Planners, explores why firms should continue to invest in developing entry-level planners amidst the rise of AI, from the risks of relying on technology over talent, to the tasks and career path that make doing so worthwhile.
Part of the challenge is what Yerger calls the ‘Christmas Tree Problem’: financial planning has very few ‘real’ entry-level planning jobs, which leaves the market for associate planners with more than three years of experience undersupplied (and drives compensation higher than many firms can sustain). Outsourcing entry-level tasks to AI agents can seem like a natural solution, though Kitces Research on Advisor Productivity has found that as firms adopt more technology, they do not reduce their reliance on human capital, and instead tend to do more for existing clients – often without adjusting fees.
Technology (like Quicken, TurboTax, and robo-advisors) has also been predicted to replace financial planners before, yet demand for human-centric advice has continued to grow. Going all-in on technology (in lieu of prioritizing the development of human capital) comes with challenges of its own, as firms that rely on off-the-shelf tools will struggle to differentiate themselves, and financial planning firms are not inherently well-positioned to compete in the technology business.
