What does ChatGPT mean for the Financial Advice Industry

There has been a lot of media hype about how ChatGPT will change the way consumers get their information. It has already been suggested that ChatGPT can give quite reasonable responses to questions relating to financial advice.

Joseph Coughlin of Market Watch demonstrates the responses about retirement planning in his article ChatGPT is about to make the business of retirement planning and financial advice profoundly human. I thought the most profound statement from the article was:

ChatGPT, and other Ais, provide content, but not real conversation.

It is not known to what extent ChatGPT can evaluate very sudden and unexpected changes in financial markets. This will be even more important if the sudden change is the beginning of a completely new economic cycle. The ChatGPT recommendations for retirement may be completely wrong. But the financial adviser is more likely to have access to expert advice regarding the effects of adverse events in the financial markets worldwide.

While software like ChatGPT may speed up many mundane processes that require a well written dialogue, for it to be meaningful, the adviser will need to provide information specific to each client. This includes their family relationship, health, employment prospect and matters relating to management of taxation.

Michael Kitces (@MichaelKitces) highlighted the relationship between ChatGPT and financial advisers in his tweet that said even ChatGPT doesn’t think it will replace financial advisers because:

Deeper expertise
Personalized service
Emotional Support
Help with difficult decision
AI is a tool, not a replacement.

According to James Rickards, a world authority on all things financial:

Investors need to be careful on about relying on GPT systems for financial advice despite their enormous processing power. The output is never better than the inputs and the market inputs are littered with bad models, false assumptions, poor forecasting records and biases.

Financial Mappers does not use ChatGPT, however, it has developed its own coding to convert the transactions in a financial plan to easy-to-read text, delivered in a report customised by the advisory company. All the adviser needs to do is write their advice based on their knowledge of the client’s needs. This information has been provided by the client and can be automatically incorporated into the report.

With ChatGPT comes cyber-threats when used for malicious purposes. Now more than ever, financial advisers need to teach their clients not to trust information or links in either text or email messages. They should be taught to always log directly into any Client Portal and always use 2FA. Likewise financial advisers need to be sure information is coming from clients and not someone who has stolen their identity.

This is one reason to use Financial Mappers when sharing information with clients or clients wishing to share information with you. By giving clients access to Financial Mappers, they can complete the Fact Find online and both the adviser and client can share information within the Client’s Portal.

To find out more watch the video, The Connect Portal- Secure Messaging and Uploading of Documents for Financial Advisers.

The same process has been used in our latest product Advice Online and Advice Online for New Zealanders. Advice Online is our new software under development in preparation for changes recommended by the Quality of Advice Review.

Glenis Phillips SF FIN – Designer of Financial Advice and Advice Online