The future for advisers lies in becoming financial lifestyle coaches, rather than technical specialists focused on client monetary goals, according to a Zurich white paper.

The paper – called BusinessFIT: Navigating Towards the Advice Practice of Tomorrow – examines societal shifts that will affect the sector in Australia to 2020 and 2025, and recommends ways to ensure advisers stay relevant.

“What became clear – in considering changing lifestyles and demographics – was people still value money but as an enabler to reach other goals, and this provides an opportunity for advisers,” Head of Communications and Marketing, Life and Investments Richard Dunkerley said.

The paper says new technologies can be harnessed to meet regulatory demands and address client needs in ways that complement personal interaction with advisers.

Zurich says discussions in developing the paper examined where the “sweet spot is between digitisation, cognitive comprehension and old-fashioned service”.

The report says: “It is natural for financial advisers to fear they will be replaced by algorithms that are less prone to mistakes, human biases and restricted by limited data or information.

“However, the real power of artificial intelligence (AI) and its automated tools lies in its ability to amplify human cognitive abilities and the unique human traits such as awareness, perception and tailored decision-making, aka the human touch, that AI solutions cannot replicate.”

The paper was developed with input from workshop participants and innovation strategist Anders Sorman-Nilsson. Social shifts identified include mistrust of establishment institutions such as governments and banks, and embrace of alternatives such as the sharing economy.

Baby Boomer clients will retire and make way for Generation Y and the Millennial cohort, bringing changes in customer goals and values, and advice delivery preferences.

The rise of data and AI will come with more regulatory burdens, as authorities struggle to keep pace with the changes.