Had it not been for my love of Lambrettas — and meeting Barry at a scooter rally in rural Brittany last month — I probably would have taken a lot longer to rethink my initial scepticism around the use of ChatGPT in financial services.
Since the launch of the prototype in November, there has been a multitude of voices explaining the potential impact of artificial intelligence (AI) in the world of financial planning.
I confess to having been dubious about AI when mountains of media attention began to focus on it at the start of the year. Since then, the clamour around it in financial services has grown even stronger.
Barry, my friend, sees himself as a potential user of AI financial services, despite having a real-life adviser
Sometimes, AI is presented as a threat. We are told ChatGPT — and potential competitors Google Bard and Meta’s (Facebook’s) LLaMA — will take over the space currently occupied by financial advisers within a matter of years.
In one account I read recently, “the disruption potential of ChatGPT… resembles a cyborg assassin”. The Terminator, in other words.
Rubbish in, rubbish out?
Despite these predictions, some advisers are unimpressed about the future impact of AI. They cite the negligible effect to date of robo advice on their business, after years of marketing efforts by online investment platforms here in the UK.
After all, isn’t it the case that financial planners deal with mostly older, affluent clients who prefer human contact with those advising them? What about the empathy needed to understand a client’s needs?
ChatGPT simplifies for Barry what could take hours to research. And the service is already improving
Surely the planning process for people with wealth involves finely balanced, complex decisions that a robo service simply can’t match?
And, taking the debate forward a notch, isn’t ChatGPT just a case of rubbish in, rubbish out?
In some of the initial tests of advice creation, typically focused on US investment and tax planning scenarios, what often stood out was the inaccuracy of the advice being given, with data relating to tax information being 10 years out of date or even more.
Let’s deal with robo advice first. According to the research service, Statista, assets under management of robo advisers have reached about £105bn, up from £60bn in 2021 and £25bn in 2019.
While it has taken longer to build up scale than some of us imagined four or five years ago, it feels like robo advice is coming of age.
In one account I read recently, “the disruption potential of ChatGPT… resembles a cyborg assassin
As for AI, what is critical here is the capacity of AI and machine learning to enhance the automated element of robo advice, in terms of providing a virtual service that is as personalised as ‘old school’ financial planning.
Also striking from Statista’s research are the potential age bands attracted to the use of robo-investment services: 62% of users by number — as distinct from assets under management — are in the 25-to-44 age group. A further 7.9% are aged between 45 and 54.
An improving service
Barry, my friend, certainly sees himself as a potential user of AI financial services, despite having a real-life adviser whom he has been with since his late 20s.
What is critical here is the capacity of AI and machine learning to enhance the automated element of robo advice
Although Barry doesn’t have any issues with his adviser, as a 40-something personal trainer with a small luxury gym he is experimenting with AI to help plan clients’ exercise routines, based on their age, gender and existing levels of fitness.
He also devises food plans to meet their different goals, be it weight reduction or muscle gain, as well as specific targets, such as running or bodybuilding.
Barry thinks ChatGPT is great, despite initial teething problems of the ‘rubbish in/out’ variety, including diets with inaccurate portion sizes that would have left a client starving hungry. It simplifies what would often take him hours to research. Moreover, he can already see the service is improving as more data is aggregated and learned.
Surely the planning process for people with wealth involves finely balanced, complex decisions that a robo service simply can’t match?
He’d be happy for his adviser to use ChatGPT with him too. Or to go to one who does.
Financial advisers can be tomorrow’s Barry. But it may mean adjusting to a different world, where the way clients are responded to takes into account the new opportunities opened up by AI.
Nic Cicutti can be contacted at nic@inspiredmoney.co.uk
This article featured in the June 2023 edition of MM.
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I certainly see chatGPT & AI enhancing an adviser’s proposition rather than necessarily replacing it in the short to medium term. Longer term who knows.
The real threat is that which has been portrayed in sci-fi films especially Terminator.
My real concern is whether AI can be manipulated to persuade investors along a particular route rather provide true open discourse and appropriate recommendations. Time will tell.