Associated Financial Planners

Associated Financial Planners (AFP) is a national firm specializing in financial planning for individuals. Unlike a stock brokerage, AFP receives no commissions from selling stocks, bonds, or other investment products. Advice is all that it sells. A typical client wants help in developing a long-range financial plan to maintain life-style and take care of retirement, college educations, aging parents, and other needs. AFP planning counselors produce these written plans after studying a client questionnaire and meeting with clients for several hours. AFP urges clients to come back for an "annual financial checkup" to see how the plan is working and whether it should be adjusted.

William Waters, president of AFP, is concerned about AFP's long-term financial plan. Waters is considering a new way to improve services and increase profitability. After talking to a company that builds expert systems, he is considering asking them to build an expert system for personal financial planning. It would use rules developed by AFP's five best planning counselors. The system would accept standard data about financial resources and personal goals, and would produce a 20- to 40-page printed financial plan. The planning counselors would study these plans and try out additional options before meeting with clients. For example, they might change a goal, such as level of retirement income, and see how the system's recommendations would change. The system would decrease the paperwork involved in producing a financial plan. It would also eliminate many oversights and other human errors and would produce more consistent plans.

Waters was surprised by the reaction when he discussed his idea with several planners. Although he said he believed that planners usually did a good job, they wanted to know why he distrusted them so much that he wanted to bring in an expert system. They also wondered how the clients would react if they believed that the plan was produced by a computer. If the system were introduced, they believed that most planners would rely on it more and more and would eventually lose their skills. Finally, they argued that this system would open the door for clients to use computerized planning systems themselves and totally bypass AFP.

Questions:

1. Explain why you believe it is or is not feasible to build this expert system.

2. If you were a potential AFP client and knew that an expert system was being used, would this sway you toward or away from AFP? Why? Would you have the same response if you knew it was a computer system but didn't know it was an expert system?

3. If you were Waters, how would you react to the planning counselors' comments?

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