Fintech is the integration of technology into financial services, and it’s transforming the financial planning landscape. Thanks to fintech, the way you manage income, expenses, investments, and other finances is rapidly changing.
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As technology and AI continue to evolve, the landscape of financial planning will continue to bring new features and accessibility to the public.
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It’s Easier to Receive Financial Counseling and Planning Advice
David Donovan, Executive Vice President and Head of Financial Services at Publicis Sapient, explained that fintech has streamlined financial counseling and planning, making the services more accessible and more affordable for a broader audience. “Robo-advisors provide low-cost, automated investment advice, removing the barriers traditionally associated with financial planning services, such as high fees and the need for direct human interaction,” he said. “Personal finance apps offer users real-time insights into their spending, savings, and overall financial health, empowering them to make informed decisions.”
Additionally, consumers can now more affordably connect with certified financial planners via online platforms. Virtual consultations add even more convenience, helping to remove the previous barriers to financial advice.
The result of these changes is that financial planning is more accessible, including for demographics that previously couldn’t afford or access traditional financial advisors. “Low-cost or even free fintech tools democratize access to financial advice, enabling younger, lower-income, or underbanked individuals to engage in financial planning,” said Donovan. “This expanded access has the potential to reduce financial inequality by giving more people the tools they need to manage their finances effectively.”
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Fintech Tools Simplify Financial Planning
Fintech tools are simplifying financial planning, too, in addition to making it more accessible. Steven Woods, CEO and Founder of Stirlingshire Investments, explained that tools such as robo-advisors, budgeting apps, and automated savings platforms provide real-time insights, personalized recommendations, and automated processes. The tools help simplify financial planning and have been highly popular among consumers.
Financial Planning Transparency Is Increasing
“Fintech has generally enhanced transparency in financial planning by providing consumers with real-time data, clear fee structures, and more control over their financial decisions,” explained Donovan. “However, trust in fintech is not universal,” he added.
Donovan said that though many consumers appreciate the increased transparency and convenience of fintech, other consumers have concerns regarding data privacy, potential security breaches, and the impersonal nature of automated advice. “This mistrust highlights the ongoing challenge for fintech companies to build and maintain consumer confidence in their platforms,” Donovan said.
Consumers Can Play an Active Role in DIY Investing
Donovan explained that platforms like Robinhood and E*TRADE have made DIY investing more accessible, allowing consumers to trade stocks, EFTs, and cryptocurrencies. “While this democratization of investing can be empowering for individuals, it also carries risks,” he added. Donovon cautioned that inexperienced investors might make uninformed decisions or react impulsively to a volatile market, and those mistakes could lead to significant financial losses. Although DIY investing tools can be helpful, users also need to have a certain level of knowledge and discipline when using those tools.
Woods called DIY investing a “double-edged sword,” noting that consumers can find taking control of their investments to be empowering. At the same time, individuals might overestimate their knowledge and could make decisions that are harmful for their finances. “This is why we advocate for a hybrid approach — combining the autonomy and flexibility of DIY investing with professional advice when it’s needed,” Woods explained. “It’s about giving people the tools to succeed, while also providing a safety net of expert guidance.”
Fintech Is Driving Innovation
Fintech is also driving innovation in many ways. For example, Donovan explained that fintech apps designed to nudge users toward better financial habits are innovative additions to behavioral finance. “[Fintech] plays a crucial role in financial inclusion by expanding access to financial services in underserved communities,” he said. “Moreover, fintech is fostering hybrid models that combine automated tools with human advisors, providing a more comprehensive approach to financial planning that leverages both technology and human expertise.”
The Future of Fintech
Fintech is already transforming the financial planning landscape, so it’s exciting to consider the additional ways that technology could shape financial planning in the future. Donovan believes that in the next decade, AI-driven tools will become increasingly sophisticated and will offer personalized and affordable financial planning support to a broader audience. He predicts that the use of AI and machine learning will increase and that they’ll result in more accurate and tailored financial planning. “However, as fintech continues to grow, there will be a greater need for regulatory evolution to ensure consumer protection, transparency, and fair practices,” he said. “The future of financial planning will likely be shaped by the balance between technological innovation and the need for human judgment and personalized service.”
Woods also predicts that fintech will continue to revolutionize financial planning, including with more advanced AI and machine learning tools. He predicts that the financial advisor role will transition from that of a traditional gatekeeper into a role that’s more aligned with a coach or strategist who helps clients navigate the financial landscape.
“In 10 years, I envision a world where financial advice is more accessible, more personalized, and more integrated into our daily lives,” said Woods. “The key will be finding the right balance — leveraging technology to enhance, not replace, the crucial human element of financial planning.”
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This article originally appeared on GOBankingRates.com: How Fintech Is Changing the Landscape of Financial Planning
