The Emperor’s new Artificial clothing

The Luddites were right. Is new technology a threat to existing financial advisory jobs?

The Luddites were right; machinery would cost them their jobs. In those days, outside of agriculture, those that came to the towns generally joined communities specialised in one industry. In the town, business diversification wasn't a thing. The Luddites were Weavers full stop. They didn't think "shall I get into insurance?" Innovation, during “Industrial Revolution 1.0”, wasn't a “biggy” either compared to following versions. They concluded a lost job would lead to poverty. Better to lose your head than starve slowly to death, so they risked the former and lost. Yet they were right, because the jobs were lost.

There will be many of today’s workers looking anxiously at the colossal investments going into AI and robotics to ask the question: is this a threat to my lifestyle and my earnings? In this piece we explain the extent of the threat to financial advisers. In the process, skewing the threat specifically towards financial advice in the UAE because that is the pitch readers are playing on. We end up with the summary: the financial advisory space in the UAE is housing plenty of Luddites. However, automation and AI can be used as tools towards superior client experience and expectation management. Therefore, providing the foundation for a more professional financial advisory channel.

The route map:

1. The UAE state of the pitch- Soft power and prioritising AI.

2. The value of fintech and AI as an advisory tool- the bad news.

3. The value of fintech and AI as an advisory tool- the good news.

4. Back to the Luddites- the future of financial advisors?

Figure 1: Wall Street Journal’s depiction of the legendary figure: King Ludd.

1.    The UAE- state of the pitch. Soft power and prioritising AI.

“Build it and they will come”- seemed to be a theme within the UAE’s debutante stages of global profiling. The buildings were real, and the people coming in were real. So, to the next stage in which The Museum of The Future is a physical reflection of the UAE’s commitment to technological innovation, economic diversification, and intent to grow the country’s “soft power” in world politics.  All going well so far. 

Within the sub-plot there exists itchy concern. The commitment towards promoting AI, in itself, is not the problem. The itch is how the financial services industry positions itself around Policy-level intent. The Policy Document, “UAE’s International Stance on Artificial Intelligence Policy”, carries one of its objectives as strengthening the “UAE’s strategic position as a global leader in the world of artificial intelligence”.

The itch?  Totally inaccurate to suggest that the broad financial services industry is misrepresenting AI as a useful Tool. It is not. According to an ENBD/PwC report, UAE Fintech start-ups raised USD 265 million in 2024 representing one third of national start-up funding. Clearly a need somewhere.

The itch is in the Advisory space. Specifically, those firms using fintech to suggest that their new gizmo, sometimes combined with enlightened training on how to use the gizmo, is going to help UAE investors and residents with superior investment returns. This needs to be scratched so that Policy intent is not diluted.

2.    The value of fintech and AI as an advisory tool- the bad news.

 Somewhere around the start of Harry Markowitz’s Nobel winning paper, he declares that the most efficient way to invest is to put 100% of your money into the specific asset which goes up the most. Unfortunately, finding that said asset has eluded the greatest of human minds.  Some of the hype around fintech and AI, here in the UAE, feels as though a breakthrough is nigh.

To test how close, I turned last week to the BBC- my reliable source of football results. In the preview of forthcoming matches, the former footballer Chris Sutton is pitched against a celebrity and AI. Even before the results, suspicions were raised by the miniscule margin of predictions resembling layman probability guesses. Most were 2-1, a couple at 1-0 and outliers at 2-0. Liverpool’s prediction (as Champions)? A 1-0 away win, they lost 3-2. Artificial yes, intelligent no. But fun.

A better description of the itch is when financial services marketing implies that there is an investment benefit likely from fintech/AI.  

Ultimately, with fintech and AI’s inability to predict the future, the need for any advisory project is to manage client’s performance expectations. For that, advisers need useful tools- this is where the better news lies.

3.    The value of fintech and AI as an advisory tool- the good news.

The UAEs fintech revolution has been encouraged by the 2023 Central Bank of the UAE (UAECB) program: “Financial Infrastructure Transformation (FIT)”. Picking on two of the 9 themes: the 2024 “Open Finance Regulation” establishes a framework for banks to consensually share data, and the digitalisation of the Dirham. Creating two areas of change that reflect declining need for routine bank jobs, like the cashier, but creating new jobs for analysts and coders.

Figure 2: ENBD/PwC

The ENBD/PwC, collaboration “From Code to Capital”, is a useful insight into how the fintech movement is changing financial services in the UAE/GCC. The most obvious change has been the “disappearing act” of bank branches. Although, a better reflection of fintech revolution is the “disappearing act” of cash as the country fast-tracks the digitalisation of the Dirham. Indeed, residents of the UAE are now familiarizing themselves with the UAECB’s March 2025 new Dirham symbol. ENBD states that 91% of the Group’s transactions are conducted digitally, “over the past decade fintech has evolved from a niche disruptor to a cornerstone of global finance”.

Figure 3: From the Dirham to the Digital Dirham.

In the UK back in the 1980’s the author’s “Listening Bank” (Midland) advertised the bank manager as living in the customer’s wardrobe. Fictional of course, the message being that the bank’s effort was to come to the customer. In practice today, the manager IS actually living in the phone and laptop. The net effect of all of this seems to have been a lot of upskilling and re-skilling. Options which were unavailable to the Luddites.

In summary, the good news from the tech sector in financial services is firstly, more efficient services for customers. Queuing in the bank has largely disappeared.  Secondly, according to a World Economic Forum, “Future of jobs Report 2025”, AI will “significantly transform the labour market creating 179 million new jobs while displacing 92 million, resulting in a net increase of 78 million jobs by 2030”.  We can assume that banking and insurance sectors would reflect something similar.

4.  Back to the Luddites- the future of financial advisors?

For the financial adviser, specifically, the news is both good and bad. The really bad news is for the financial adviser equipped only to sell products. These are the Luddites of the current advisory space.

For the product salesman in the UAE, they should be in fear of extinction. They still roam the UAE in large numbers. The banks and insurance companies still harbor them, and then you have the highly variable “independent” financial advisers selling product under a variety of regulators which simply accentuates the variability of performance.

The product salesman has three trends to fear. Firstly, automation and AI within the banking and insurance businesses will kill off routine jobs. Creating leads and product knowledge can be made to be routine. Secondly, the onset of Workplace Savings law (in place in the DIFC and laws emerging onshore), means that increasingly, employees will be grappling with the need to understand risk. Regulators will have to deal with the quality of advice. Thirdly, with the Central Bank now focused on Financial Literacy- we should expect increasingly more residents to become more knowledgeable and aware. The need for quality advice increases.

The good news is that automation and AI can be used to provide better tools for managing client expectations. Day-to-day tasks such as client service; data analysis; balance sheet aggregation and analysis, portfolio planning, financial planning, risk assessment, trend predictions, and probability analysis- will all become part of the armory of successful financial advisers. The scope for providing quality advice on the back of a broader range of tools is clear and obvious.

The successful financial advisers will follow one of the routes in the Tom Peters maxim: “get big, get niche, or get out”. The “Get Big” part of the equation might relate to the firms who through their financial strength can buy more tools. The “Get Niche” part of the equation will relate to the adviser who becomes expert in certain highly specific fields: Trust work for example.

In summary, the financial advisory space in the UAE still contains a large number of Luddites. These are those that sell investment and/or insurance products, without any actual skill or knowledge of the elements of “financial advice”. The banks and insurance companies, and many Independent Advisory firms have been applauding these people in the manner of Hans Christian Anderson’s “Emperor’s New Clothes”. These are newly joined by platforms seemingly suggesting that, as Revolution 4.0 speeds towards embracing artificial intelligence, their gizmo will get better investment results.

However, recent government decisions are clear in the direction of supporting technology and AI as well as Financial Literacy. This has to end up with an increased standardization of quality on financial advice. That then becomes the line in the sand between the Luddites being put to sleep on the one hand and the emerging professionalization of the financial advisory business. The Emperor is in a position to be clothed appropriately.

End.