Most of us remember the story line behind the Terminator Movie series with Arnold Schwarzenegger, but just in case, let me refresh your memory.  The basic theme goes something like this; Man creates artificial intelligence in robots to help make life more efficient and easy; Robots, lacking emotion and caring, take over the planet; Man then has to battle to regain control.

Advances in computing technology have inspired some to try and create a new resource for financial planning called the “robo” advisor.  As the financial industry, in general, is based on numbers and analytics, this seems like a logical step in the creation of solutions to questions about retirement income as well as general cash flow management.

Why did I reference the Terminator movies?  Because human emotions have been eliminated.  In a “robo” advisor world, how does the old saying “they don’t care what you know until they know that you care” apply?  Theoretically, people will not care what a computer knows because they will never feel that the computer cares, even if the computer analytics were accurate.

There can be no argument that computers can process a given set of facts faster and more efficiently than humans, commoditizing the results.  While there may be situations where this is effective, what if linear thinking is not the best path to a solution?  I would suggest that humans are better at creating strategies by 3-D, forward-looking thinking vs. analytical, past-performance calculating.  Thereby lies the real value of having a financial planner on your team.

Reflect on the character, Spock, from Star Trek.  His persona was based on using “logic” as the method to solve problems.  Over time, he learned that experience, instinct and an ability to “connect the dots” is also a very powerful tool for sound decision making.

Consider the multiple issues in getting to and living in “retirement”.  A computer can calculate the account value needed to create a certain income stream, for so many years at some growth and inflation rate.  A human financial counselor will talk to you about lifestyle transitions, selecting the right strategy for social security, caring for aging parents, etc.   We at Karp Financial Strategies call this the period of reinvention (aka, retirement), and there are many undefined events that cannot be modeled.  Considering that life is not linear and the stock market is certainly not logical, be sure that “flexible” is part of your strategy.