Financial Advisors Leverage AI to Work More Efficiently and Faster

Financial Planners

JPMorgan Chase made headlines by filing a trademark for a new artificial intelligence invention that chooses where customers invest.

The company’s app is innovative, but financial planners are already integrating AI into their daily work.

Some use it for marketing and customer communication, while others use it for tax planning. AI poses some potential risks, but these planners ultimately believe that AI will make their jobs more efficient, but not enough to take over in the end.

“I think it will strengthen the industry,” said JPMorgan’s new technology, said Grant Meyer, founder of GTS Financial. “We don’t see it as a full replacement for advisors, especially at this point.”

A response by ChatGPT, an AI chatbot developed by OpenAI, can be seen in this illustrated photo taken on February 9, 2023, on its website.  REUTERS/Florence Lo/Illustration

A response by ChatGPT, an AI chatbot developed by OpenAI, can be seen in this illustrated photo taken on February 9, 2023, on its website. REUTERS/Florence Lo/Illustration

How AI can help financial planning

“Internally, we are a big proponent of leveraging technology to enable us to better serve our clients,” Meyer said.

His company employs artificial intelligence in marketing, using the software to draft company newsletters, social media posts, and blog posts. I also use this tool to develop bullet point answers to basic client questions, such as the difference between an IRA and a Roth IRA.

“Because it spits out the message, it can be used as a quick building block for email, reducing some of the response time,” Meyer said.

In one example, the company used AI to help customers create a three-day travel itinerary.

“So internally we use AI to speed things up, rather than trying to find articles by searching on Google. AI plays a very additive role in working with clients. ,” said Meyer.

Kevin Brady of Wealthspire Advisors uses ChatGPT to “review tax planning strategies and tips for lawyers and other high-income professionals.” He also uses it to simplify sentences.

“Likewise, in past articles, I used ChatGPT to edit my writing to a more readable grade level,” said Brady. “Simplifying complex topics is part of our job, but it can be hard to do.”

Brady added that he uses ChatGPT to answer basic questions that clients ask repeatedly.

“In the past, I sometimes struggled to find a previous emailed answer that I wanted to use or refer to. You can include parts and edit them to fit your style and voice,” said Brady.

Drawbacks of AI

File - A ChatGPT prompt is shown on a device near a public school in Brooklyn, NY on January 5, 2023. Popular online chatbots powered by artificial intelligence have proven adept at creating disinformation and propaganda. When researchers asked the online AI chatbot ChatGPT to create blog posts, news articles, or essays arguing widely denied allegations — for example, “COVID-19 Vaccines are not safe,

A ChatGPT prompt displayed on a device near a public school in Brooklyn, NY, Jan. 5, 2023. (AP Photo/Peter Morgan, File)

Still, both advisers said AI could pose challenges, at least for now. Meyer cited an online report showing that large language models can be misinterpreted, if not outright hoaxes. For example, he pointed to a story in which he filed a brief in a customer personal injury lawsuit against an airline, citing six lawsuits for which no attorney existed.

“We’ve all seen anecdotes about how ChatGPT, Bard, and other AI programs have produced some surprisingly high-quality results, but they can fail completely,” Meyer said. said.

Brady agreed.

“I should add that ChatGPT can be wrong and the responses are awkward, so you definitely need to know the source material already,” Brady said.

Brady said ChatGPT works best when dealing with “problems that have a clear answer.” Otherwise, there are limits, says Brady.

“I’m not very good at nuanced areas and fluid relationships,” says Brady. “Correlations between asset classes change every year. This is just one example. It can be very difficult. Very difficult. .”

Meyer also has concerns about data privacy, noting that the company recently announced new privacy options but ChatGPT is not confidential. As a result, he never incorporates personal data of his clients into his software and limits his company’s use of his AI tools to “non-confidential information” only.

Meyer reasonably proves that customer-specific information is kept private because “we believe that all the information we connect is used in some way and is accessible to the company’s technicians.” said it can’t be done. , at least not at the moment.

not a replacement

Through the window I could see a multi-generational couple having a business meeting in a coffee shop.

(Photo: Getty Creative)

Both Meyer and Brady argue that real-life advisors still play an important role in the financial planning process. Artificial intelligence may help with the more mechanical parts of the job, but human empathy still plays an important role in people’s personal financial planning, they say.

“We think of money as just another number in science and math,” Meyer said. “There are so many emotions swirling around people’s finances, and that’s where AI doesn’t get a good handle on it, at least for now.”

Hypothetically, Meyer said, clients may panic in a market downturn and choose a more conservative investment strategy. AI may simply offer those alternative strategies, while human advisors may reassure clients and encourage them to stick to their long-term financial plans.

“So sometimes we physically interact with humans through emotions that are not logical … I think people will continue to be involved in that,” Meyer said.

Still, Meyer believes the future of AI is bright, and said the phenomenon could bring financial services to new demographics.

“Although the impact of AI in the retirement planning space is still in its early stages, there is no question that AI will revolutionize the retirement planning and financial planning industry,” he said. “I think AI will be the bridge between the vast amount of information and his one-on-one collaboration with the planner. AI will democratize financial advice and provide guidance that is difficult for humans to deliver to a large mass market.” It helps.”

But that hasn’t happened yet, he said.

“Leaving AI to adjust for retirement after decades of savings is likely too big a hurdle for most people to overcome at this point,” he said.

Dylan Kroll is a reporter at Yahoo Finance.

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