Kestle’s firm created their own software to save clients money.

The world of robo-advisors and artificial intelligence is here, and four-year MDRT member Jonathan Peter Kestle, CLU, B. Comm, isn’t worried. He uses technology to save clients hundreds of thousands of dollars and himself hours of work.

Yes, there’s a value proposition of robo-advisors offering clients low fees, noted Kestle, of Ingersoll, Ontario, Canada. “That’s a short runway, though. It’s a tough living selling only term life insurance,” he said. “Term insurance is a commodity. It’s a race to the bottom market.” Kestle believes consumers will soon be able to go to a supermarket in Canada and buy it.

“If you’re not a commodity, then you’re OK.” People need financial advice, especially as their lives and health become more complicated.

“Technology won’t replace financial advisors,” Kestle said. “It’s the advisors using technology who will replace advisors not using technology.”

Finding tax savings

Kestle’s clients are age 55 and older who are nearing retirement. They know approximately how much money they have accumulated for retirement. Their challenge in retirement becomes how to strategically spend those funds.

Often, Kestle said, advisors approach this based on current best practices; however, that can come up short since it doesn’t offer a customized solution for each client. That task, when done manually, is daunting. In Canada, one person could have up to 15 different sources of retirement income and a working couple could have as many as 30 sources. These range from a mix of government pensions, company pensions, corporate assets, registered savings, tax-free savings and so forth.

In these accounts, there are specific ways they work and tax efficiencies regarding when to withdraw from an account in relation to all the other retirement accounts in someone’s portfolio. When done to the maximum benefit, the tax savings for some clients can be more than $100,000.

Advisors tried to tackle this tangle of retirement accounts and stipulations around each of them and found they couldn’t do it, or at least not efficiently enough for this to scale to a sustainable business. And that was a problem. A problem that didn’t
have a solution — until Kestle and his firm’s co-founder, 33-year MDRT member Ian C. Moyer, also of Ingersoll, hired someone to build a solution.

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