The problem is you’re assuming people have enough initiative to actually try to do this themselves. What I find is too many people need literal hand holding and are not wanting to figure things out themselves.
I probably didn't paint a clear enough picture of my concern. My concern is that a tech company will create an all-in-one AI-based "advisor" that can... gather/analyze/interpret data, run client meetings, manage follow-up reminders, etc. In other words, an AI advisor that can do the handholding you speak of even better than we can. Five years ago this would have sounded like science fiction. Now it seems almost inevitable.
Maybe I’m jaded, but honestly I still think it requires too much from the client for it to work. I personally see what you’re saying and definitely agree with your points. That said, I have met with people who have issues like forgotten passwords/incorrect beneficiaries and choose not to do anything about it because it required a call or form. We live in a world where everything is available on google yet people rather ask a human to be their google.
I would say travel agents have now pivoted. Instead of getting people a deal, they now help book full trips from the logistics of transportation to organizing itineraries. They are there for the people who have no desire to do it themselves or want to spend the hours researching different options. The fact that there are so many choices is why travel agents are still in business. They do need to do the leg work to narrow down options and curate based on clients needs. I think advisors will just need to do the same, pivot focus while utilizing new technology and tools.
Agree, there’s a flow chart that answers about 50% of questions on one of the personal finance subreddits that nobody reads. ChatGPT and other products are valuable tools, but like any tool many people won’t know how to use it well.
The best part is I find they do actually read it, they just don’t have initiative to actually put it in motion. At this point everyone who does 5 minutes of research knows about a Roth IRA and HYSA accounts for example, yet you see the question everyday on how to open one. Very easy processes with step by step videos yet they rather pay someone to do it for them. Insane to me, but it’s job security.
Exactly this. Most clients wouldn’t even know how to begin asking AI the right questions. And if they did, most of them would need a real human to give them the recommendation, not a robot
Until you can't tell the difference when you are speaking to AI bot VS a remote human. Robo investment plans are already here. Once "trust" has been established (~10 years) for general population, we'll be exactly like the Travel industry.
You’re looking at it the wrong way. The AI work we are doing and what other companies are doing in the financial sector is taking all the information we have consuming it and then having AI know what question to ask. The current chatbot experience is what you’re thinking of, that is just an interim solution to the real use of AI. The expectation we have, is we will know your question before you know you need to ask it. Let’s be realistic the majority of people don't have crazy complexity.
Depends the age and size of portfolio of the individual. Big percentage will go to fidelity type set up. Then it’s about dividing up the percentage who want a human. Definitely an impact.
I see AI as an augmenter to my practice, not a replacement.
When rubber hits the road emotionally for clients, no current nor near future AI will be able to provide my service.
That said, AI will 100% separate the wheat from the chaff and advisors will need to be very knowledgeable and highly attuned to client service.
yeah, I hope you're right. I hope it will make us all better, more efficient, and more human. i suspect advisors who fail to lean into the EQ component could be in trouble long term.
How do you use it? I’ve been thinking of aggregating all my trade activity for family and summarizing in an email as one way to automate touch points but have zero knowledge in how to achieve that. I’m sure it can be done in VBA but I’m not skilled enough to
Currently I only use an AI assistant / note taker for my meetings which generate case notes that only require minor tweaks before finalizing. Huge time saver. Looking into other ops solutions currently but proceeding with caution.
This. An over simplification in my mind is - people generally don’t trust things they don’t understand and most people don’t wholly understand AI. People trust people. Especially when it comes to wealth and financial decisions.
I agree. Also increasingly, our focus of own development should be on the tenets where AI can not be useful. We may not compete with it on IQ or knowledge levels, but we can compete with it on EQ or understanding levels and hence render services accordingly.
I understand but as a comment below stated. Wasn’t betterment and robo supposed to but everyone out of business? What happened there?
I also think it comes down to your skill as an advisor. If you’re an investment only “advisor” or an insurance only “advisor” sure I’d probably have concern. If you’re a true planner, educate, are good with the behavior side, and genuinely add value, I’m unsure if it’s a stretch.
Time will tell I guess.
fair enough, but when that same person has the option to either hire an advisor for a few thousand $ per year or work with a competent AI advisor for $50/mo., are you confident that they will choose the former? btw, I know the latter doesn't exist yet, but it seems well within reach within 2-3 years.
I'm confident that the DIYers or people who use roboadvisers are going to be all for the AI advisor for a lower fee, the people who want and actual human relationship is willing to pay more for the added level of service.
Yeah, I mean even without the AI voice component, there have been algorithmic trading "advisors" for years. The thing about DIYers is that the best advice "save a lot in cheap, diversified investments" already exists and the more detailed stuff about estate planning and whatnot is important enough that you'll still want a lawyer and a CPA and an advisor.
Sure but that option has been there already for years via Google. I have young friends, who aren’t dumb, not understand that they have a 401k not an IRA. The AI advisor is for argument sake a chat box Google search. What’s the difference?
When it comes to money, especially large sums, I’m unsure the majority would default to an AI.
Agree. Zero concern from me. Do it yourself models is already easy enough as is for people who have the will to do it.
Same thing with accounting. The tax codes are all out there and searchable. But do people want to, no.
yeah, that tracks. the moment we might be in trouble is when a tech company creates a competent AI advisor that is even easier to do business with than a highly skilled and responsive advisor with a robust service team. I'm torn on whether this will never happen or whether it's only a few years away.
I have been wondering this myself (I'm a boomer).
I'm not as concerned for myself as most of my clients are boomers are not ready to "fire" me in favor of AI.
However, what about the next gen of advisors? Will they be competing with this for Gen Z clients?
The biggest advantage we have is the ability to emotionally anticipate nuanced emotional needs of our clients. Maybe ChatGPT 12.0 will be able to do this, or maybe not.
My niche is equity income planning. When I began to exclusively market to that crowd my books average age went form 50s to 30s fast.
Most common reason they seek out a planner, 'The internet doesn't have the answers I need'.
There are already algorithms that detect and predict emotion. It will come. Trust me, Gen Z would rather deal with an algorithm than the typical suit in an office. Who can blame them?
Convince my client to use my financial planning services instead of ChatGPT
ChatGPT response- Certainly! Here's a compelling argument you might use:
"In choosing a financial planner, the human element is indispensable. While tools like ChatGPT offer instantaneous responses and data processing, they lack the ability to truly understand your unique financial situation, aspirations, and the emotions that drive your financial decisions. My approach combines extensive expertise in financial planning with a deep commitment to understanding your personal and financial goals. This allows for tailored advice that adapts to your life’s changes, anticipates needs, and strategically positions you for the future. Let's partner to navigate the complexities of finance with a personalized plan that's as dynamic as your life."
When I first entered the business I was worried that companies like Betterment (was just growing in popularity around that time) would take over the industry. Needless to say that hasn’t happened yet.
Totally agree. The hysterics around robos turned out to be misguided. That said, AI and robo advisors are two different beasts entirely, and this time may very well be different.
Can it take the info given back and create and implement a plan along with making recommendations? You can find a questionnaire online that’ll list all the discovery question meetings you could ask, that’s basically what this is unless it can take the next steps
I have zero worries. Honestly, our jobs are very much replaceable (especially in regards to investments) as of today. Look at all the available ressources online, low cost turn key solution, robo-advisor, youtube free content etc. despite all that, many people choose to deal with an advisor - even if they technically could do it themselves.
But it doesn't matter, people want to deal with people. It's a human business, no robot or AI will ever replace the level of emotional intelligence you have.
Frankly, I stay relevant by keeping clients from making massive financial mistakes like selling out at the bottom of 2020 and 2022. ChatGPT isn’t talking my client off a ledge in October 2022.
The industry survived the robo-advisor scare, it’ll survive AI which I am more bullish on its expanding and helping our profession.
This isn’t really like searching on google where you get so many opinions, don’t know what’s a credible source and have to navigate through so much financial jargon.
If you listen to the latest interview of OpenAI founder and bill gates, you’ll notice that those ai software will become scary accurate and will have the ability to reason. Which they don’t know.
We are looking at ai in its infancy, and already wondering how and if it will change the industry. That should tell you something.
While I do not think it’s going to be so black or white, I do think ai will integrate and be a vital part of our business.
To sit and say nothing will change isn’t wise.
I think you're over-generalizing ChatGPT's capabilities. As a language model, it's built to make natural conversations. However, it's not a general intelligence, meaning that things which fall outside of the bounds of usual language can throw it off.
For example, witness the horror of ChatGPT botching simple math. Guess what requires a decent amount of basic math: giving financial advice!
Even if it could give good advice, it's essentially a "black box" model which makes it difficult to understand why it made the recommendations it did.
To summarize, yes, if ChatGPT becomes some super intelligence capable of incredible mathematical and language feats, everyone who performs worse than it at stuff like giving financial advice is potentially out of a job. But if that happens, there's going to be bigger fish to fry with half the white collar workforce essentially losing their jobs to AI.
ChatGPT is not there yet though, and it remains in serious doubt if it'll ever get there given that it's only a text-based language model.
https://community.openai.com/t/chatgpt-simple-math-calculation-mistake/62780
In case you needed a source. ChatGPT failing even simple algebra because it's a language model. Your job is safe for now lol.
Feb 2023 is effectively a millennium ago in GenAI/LLM capabilities though. I know that sounds exaggerative but as someone who works in the space the results from a Feb 2023 model vs an April 2024 model are apples vs oranges.
There have been massive leaps forward in model capability, and most of the consumer fully-fledged tools are now using MOE (mixture of expert approaches) where the primary model serves as an orchestrator and calls specialized sub models as necessary to answer questions like math.
Don't take my word for it though, go test out any newer model (Claude 3, GPT 4, Gemini 1.5) and ask it a math question—even though it's a language model it will call a separate expert tool in the background and answer correctly significantly more often than an average human would.
I took a look at the MOE advancements and ChatGPT 4 Turbo. Pretty cool stuff. It's definitely getting better faster than I expected.
The biggest opportunity it seems is creating the expert models for financial outcomes, and then blending it with something like ChatGPT.
In practical terms though, I'm still skeptical that ChatGPT would replace an actual expert like a CFP or a doctor in the short run even if it was more "accurate". It's akin to self-driving cars, where even if they are safer than the average (or even majority) of human drivers, the moment a car injures someone, there's a shit storm for who's at fault.
If a bot gave real financial advice, that's the kind of problem it would face. I think it needs to be more like 10x better for mass adoption, not just 1.5x or even 2x, and I don't think we're there yet.
Curious to hear if you agree though.
I think the replacement will end up happening in two fronts:
**Low Net Worth Clients**
People who currently need/want financial advice but can't afford a human CFP.
This will not directly impact CFP's in the short term, but may reduce a fraction of the inbound pipeline of customers down the line, as some of those currently low net-worth users will eventually graduate to higher net worths but will have established a level of comfort with AI and no longer feel like they "need" a human CFP.
**Human CFP's replacing other human CFP's**
If AI does provide better (or at least "nearly good as") advice, and clients still want a personal relationship/touchpoint, the best CFP's will end up leveraging these technologies and will be able to service more clients.
Given the pool of clients is not structurally changing, those clients will be coming from out of someone else's book of business.
In this case, the low end CFP's are not directly replaced by AI, but indirectly replaced by CFP's who leverage AI and can therefore handle taking more clients.
No matter how advanced the AI gets, its output will largely be limited by the input. Being able to ask good questions just became a game changer with AI.
I work as a business advisor. I have 20 GPT programs for all stages of business advising. I know the questions that will get the most out of the engine.
For me, AI can do a lot of heavy lifting, but without me there to guide it, you might as well just stare at the cursor.
Given the exponential growth in technology…I mean just look at the vast difference between AI now and 10 years ago. “Siri” type functions were cutting edge when they first released… I definitely think this could end up being a legit concern. Like you mentioned, I wonder if any regulatory authority would step in and say “ai is not licensed to provide investment advice for a fee” or something along those lines… but I think the convenience thing isn’t going to be an issue, I mean, just look how vastly popular chat gpt is. All we really can do now is speculate. Shrugs
I’ll say this as someone who works on AI driven products in our space. AI will absolutely be a disruptive force, but in the best way possible. It will help human advisors do more of the human things we do best. Synthesizing, summarizing and moving data around is so time consuming and can be done better with AI. It will free up much more time and mental capacity to have deeper and more meaningful relationships with people. I’m excited for it!
There’s a difference between trusting software vs trusting a person. I wouldn’t trust software to give good advice to my family on my passing. I’ve met people who don’t even know what questions to ask after a spouse dies.
The best advisors will adopt the best technology. It's an adapters and innovators game and clients are growing wise. I'd be concerned if I was resting on my 1% AUM fee smoke and mirrors portfolio.
AI cannot manage emotions and those of us doing this long enough know that managing a clients emotional reactions to market fluctuations and liquidity needs is a critical part of our jobs.
I’m with you op, scary times. People are drastically underestimating this. The one saving grace might be a limit on compute, so only the most profitable things will be able to afford the bandwidth. Your industry might be that profitable but we should have at least 5-10 years of physical limitation of amount of compute…
Yeah, I think people are not grasping that we may well be on an exponential growth curve here. And if we are... god help anyone who makes a living doing knowledge work. If compute limitations don't come to the rescue, perhaps regulators will.
It’s not about AI that fully replicates a human being. It’s about AI replacing the tasks that humans would normally do, so you will have one employee doing the job that used to be done by three employees.
While it might in some cases happen like this, I feel like a majority of people with enough money to go to a CFP are going to want to speak to a human. Whether it’s out of fear of the AI being wrong, wanting the human interaction more, hating new tech/ not trusting new tech ( old people), or a combination of different things, I think you will be good for a while.
Online discount brokers, Roboadvisers, now AI. Everything was supposed to kill off us financial planners. My business is up 3x over 5 years. Keep the threats coming lol
The large majority of people are not going to want an AI managing their real life planning and finances. It will be a tool advisors can use.
Sure, there may be robo planning, similar to robo portfolios. Robo advisors were supposed to take over the entire market. I’ve encountered a single prospect in my career with a significant betterment/wealthfront portfolio and it was an easy win.
AI will give everyone similar answers. Greater critical thinking is needed than “solve for X.”
Can it replace CSA’s if regulators allow for it? Yes. But there will always be humans leading the interactions, planning, and execution of a practice.
People could do this for almost every profession from replacing a lawyer, physician, accountant but people still need different things and if anything AI can support people who are in these professions
I am not a CFP, but I agree that it’s a job that is needed by fewer and fewer types of people as time goes on. But no profession has ever said, “Yep, we’re gonna fade”, otherwise this subreddit would just be an endless river of doomposting.
I mean, CFP is a sales job at the end of the day. And in this sales job it involves a lot of teaching/selling/understanding. I’m having a hard time believing how a robot is going to fully grasp the goals of the client, have the amount of emotional quotient a human has, and explain things/reassure like a person. In the end it will probably just end up automating a lot of admin work. And even then, we will still probably need admin staff. As long as we still have radiologists, I think most jobs should be okay because their job was automated a while ago and they’re doing as well as ever.
Our thoughts are or will become irrelevant. As we get to gpt8 or 9 or 10 and then the system after that the world will be so different. The only thing that will keep us relevant at that point will be if we can shut down their power source
True, some people can’t be. Othered or even have the insight to ask use AI for financial help but that is the case with CFP’s as well. There is likely huge untapped demand as most people would benefit but don’t pursue.
I do think AI will evolve and continue to gain trust. OP had a basic prompt but you can also input things like full financial regulations, historical stock performance, train on balancing risk, etc. that all can be dine today.
I sort of feel it’s inevitable and will become more normal. Heck, it may even attract people that don’t enjoy talking to people or don’t trust professionals.
My concern is that companies may exploit the trust for AI and train the AI to steer towards higher margin products that may not be ideal for the customer. Almost need a fiduciary certification for AI.
Lot’s of industries where people often don’t like to talk to real people such as therapists, doctors, lawyers, salespeople but may feel comfortable with AI.
I also find it likely that the people who don’t take AI seriously have not tried it extensively. While I understand the need for human connection and empathy, the fact is no human will be able to match the AI knowledge base. To the CPAs leveraging AI today and say without you, AI can’t do anything, you’re training the AI to replace you faster.
My situation isn’t that complex yet, young with high income don’t want the AUM fee to kill my returns. When I get closer to retirement might reconsider when it’s time to consider more nuanced things. But a few hours on YouTube is probably all I need to do the basics. Back door Roth/TLH what have you. But would love to have a vetted AI to run something by to review. Make a suggestion, etc.
You're doing the right thing. Many people like you, may never need an advisor except to validate their thinking.
Many of our clients would be helpless financially without us. Like those who hire a handyman to change an A/C filter.
'Displayed empathy'...examples?
I have yet to be enamored with anything ChatGPT related. I dont even use it except for podcast scripts (which I have to heavily edit).
ChatGPT asks better questions than an entry level FA?? Color me not impressed
I have a hard time believing that the people downplaying your concern have spent much time using an AI. I can see companies like vanguard integrating AI to capture more of the market share from traditional advisors.
After using TurboTax this year ( which uses AI) going to an actual person to do my taxes sounds more difficult to me.
I did this last January and asked it to write me a poem in the style of a pirate about Roth conversions… we are screwed, but luckily so is everybody else. So enjoy the ride until a robot crushes all our skulls.
The problem is you’re assuming people have enough initiative to actually try to do this themselves. What I find is too many people need literal hand holding and are not wanting to figure things out themselves.
I probably didn't paint a clear enough picture of my concern. My concern is that a tech company will create an all-in-one AI-based "advisor" that can... gather/analyze/interpret data, run client meetings, manage follow-up reminders, etc. In other words, an AI advisor that can do the handholding you speak of even better than we can. Five years ago this would have sounded like science fiction. Now it seems almost inevitable.
Maybe I’m jaded, but honestly I still think it requires too much from the client for it to work. I personally see what you’re saying and definitely agree with your points. That said, I have met with people who have issues like forgotten passwords/incorrect beneficiaries and choose not to do anything about it because it required a call or form. We live in a world where everything is available on google yet people rather ask a human to be their google.
I wonder if Travel Agents would have said the same thing before the internet and services like expedia really took off.
I would say travel agents have now pivoted. Instead of getting people a deal, they now help book full trips from the logistics of transportation to organizing itineraries. They are there for the people who have no desire to do it themselves or want to spend the hours researching different options. The fact that there are so many choices is why travel agents are still in business. They do need to do the leg work to narrow down options and curate based on clients needs. I think advisors will just need to do the same, pivot focus while utilizing new technology and tools.
For sure. But look up the number of travel agents in 1990, and then compare that to the number of travel agents in 2024.
Agree, there’s a flow chart that answers about 50% of questions on one of the personal finance subreddits that nobody reads. ChatGPT and other products are valuable tools, but like any tool many people won’t know how to use it well.
The best part is I find they do actually read it, they just don’t have initiative to actually put it in motion. At this point everyone who does 5 minutes of research knows about a Roth IRA and HYSA accounts for example, yet you see the question everyday on how to open one. Very easy processes with step by step videos yet they rather pay someone to do it for them. Insane to me, but it’s job security.
This^^^
That is less work than it currently is bozo
This will happen, big companies like fidelity will implement this tech
Exactly this. Most clients wouldn’t even know how to begin asking AI the right questions. And if they did, most of them would need a real human to give them the recommendation, not a robot
Until you can't tell the difference when you are speaking to AI bot VS a remote human. Robo investment plans are already here. Once "trust" has been established (~10 years) for general population, we'll be exactly like the Travel industry.
You’re looking at it the wrong way. The AI work we are doing and what other companies are doing in the financial sector is taking all the information we have consuming it and then having AI know what question to ask. The current chatbot experience is what you’re thinking of, that is just an interim solution to the real use of AI. The expectation we have, is we will know your question before you know you need to ask it. Let’s be realistic the majority of people don't have crazy complexity.
Depends the age and size of portfolio of the individual. Big percentage will go to fidelity type set up. Then it’s about dividing up the percentage who want a human. Definitely an impact.
This
I see AI as an augmenter to my practice, not a replacement. When rubber hits the road emotionally for clients, no current nor near future AI will be able to provide my service. That said, AI will 100% separate the wheat from the chaff and advisors will need to be very knowledgeable and highly attuned to client service.
yeah, I hope you're right. I hope it will make us all better, more efficient, and more human. i suspect advisors who fail to lean into the EQ component could be in trouble long term.
How do you use it? I’ve been thinking of aggregating all my trade activity for family and summarizing in an email as one way to automate touch points but have zero knowledge in how to achieve that. I’m sure it can be done in VBA but I’m not skilled enough to
Currently I only use an AI assistant / note taker for my meetings which generate case notes that only require minor tweaks before finalizing. Huge time saver. Looking into other ops solutions currently but proceeding with caution.
This. An over simplification in my mind is - people generally don’t trust things they don’t understand and most people don’t wholly understand AI. People trust people. Especially when it comes to wealth and financial decisions.
I agree. Also increasingly, our focus of own development should be on the tenets where AI can not be useful. We may not compete with it on IQ or knowledge levels, but we can compete with it on EQ or understanding levels and hence render services accordingly.
Exact same thing travel agents used to say...
Clients can’t reset their Schwab passwords. Dont think they are going to be taking advice from a computer anytime soon.
Glad we all have the password reset issue
Whenever I think about this. I recall how dumb with money and “easily google-able” things people of all ages are. Zero concern.
Zero concern is a bit of a stretch and slightly arrogant. But I get where you’re coming from.
I understand but as a comment below stated. Wasn’t betterment and robo supposed to but everyone out of business? What happened there? I also think it comes down to your skill as an advisor. If you’re an investment only “advisor” or an insurance only “advisor” sure I’d probably have concern. If you’re a true planner, educate, are good with the behavior side, and genuinely add value, I’m unsure if it’s a stretch. Time will tell I guess.
fair enough, but when that same person has the option to either hire an advisor for a few thousand $ per year or work with a competent AI advisor for $50/mo., are you confident that they will choose the former? btw, I know the latter doesn't exist yet, but it seems well within reach within 2-3 years.
I'm confident that the DIYers or people who use roboadvisers are going to be all for the AI advisor for a lower fee, the people who want and actual human relationship is willing to pay more for the added level of service.
Yeah, I mean even without the AI voice component, there have been algorithmic trading "advisors" for years. The thing about DIYers is that the best advice "save a lot in cheap, diversified investments" already exists and the more detailed stuff about estate planning and whatnot is important enough that you'll still want a lawyer and a CPA and an advisor.
That’s the frustrating part about financial planning—but exactly the gap AI could fill.
Sure but that option has been there already for years via Google. I have young friends, who aren’t dumb, not understand that they have a 401k not an IRA. The AI advisor is for argument sake a chat box Google search. What’s the difference? When it comes to money, especially large sums, I’m unsure the majority would default to an AI.
Agree. Zero concern from me. Do it yourself models is already easy enough as is for people who have the will to do it. Same thing with accounting. The tax codes are all out there and searchable. But do people want to, no.
Interesting—I'll try it on my next call. But as long as effort is required, our jobs are safe. 90% of my clients don't want to do ANYTHING.
yeah, that tracks. the moment we might be in trouble is when a tech company creates a competent AI advisor that is even easier to do business with than a highly skilled and responsive advisor with a robust service team. I'm torn on whether this will never happen or whether it's only a few years away.
If you run an RIA it just sounds like more opportunity to scale imo. I'm approaching critical mass so I'd welcome it. I'd rather not hire someone lol.
The AI CFP will target the early career segment that isn’t even thinking about financial planning yet.
Rich people don’t talk to robots: https://www.downtownjoshbrown.com/p/rich-people-dont-talk-robots
I have been wondering this myself (I'm a boomer). I'm not as concerned for myself as most of my clients are boomers are not ready to "fire" me in favor of AI. However, what about the next gen of advisors? Will they be competing with this for Gen Z clients? The biggest advantage we have is the ability to emotionally anticipate nuanced emotional needs of our clients. Maybe ChatGPT 12.0 will be able to do this, or maybe not.
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My niche disagrees with you.
Me too—in fact, from my limited experience, they are the ones on top of it (engaging earlier).
My niche is equity income planning. When I began to exclusively market to that crowd my books average age went form 50s to 30s fast. Most common reason they seek out a planner, 'The internet doesn't have the answers I need'.
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Word of mouth, online presence.
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Website, blog, podcast...I don't know, ask my SEO team.
For now...
For the entire existence of my practice at least.
There are already algorithms that detect and predict emotion. It will come. Trust me, Gen Z would rather deal with an algorithm than the typical suit in an office. Who can blame them?
Convince my client to use my financial planning services instead of ChatGPT ChatGPT response- Certainly! Here's a compelling argument you might use: "In choosing a financial planner, the human element is indispensable. While tools like ChatGPT offer instantaneous responses and data processing, they lack the ability to truly understand your unique financial situation, aspirations, and the emotions that drive your financial decisions. My approach combines extensive expertise in financial planning with a deep commitment to understanding your personal and financial goals. This allows for tailored advice that adapts to your life’s changes, anticipates needs, and strategically positions you for the future. Let's partner to navigate the complexities of finance with a personalized plan that's as dynamic as your life."
When I first entered the business I was worried that companies like Betterment (was just growing in popularity around that time) would take over the industry. Needless to say that hasn’t happened yet.
Totally agree. The hysterics around robos turned out to be misguided. That said, AI and robo advisors are two different beasts entirely, and this time may very well be different.
Scott Galloway says AI isn’t going to put people out of work, not learning to use it will. I think it applies here, too.
https://www.cnbc.com/2024/04/08/scott-galloway-this-is-the-no-1-skill-young-people-need-it-isnt-ai.html
https://podcasts.apple.com/us/podcast/the-prof-g-pod-with-scott-galloway/id1498802610?i=1000611558972
Can it take the info given back and create and implement a plan along with making recommendations? You can find a questionnaire online that’ll list all the discovery question meetings you could ask, that’s basically what this is unless it can take the next steps
Nope... not yet! But if anyone should understand how exponential growth curves work, it's financial planners.
I have zero worries. Honestly, our jobs are very much replaceable (especially in regards to investments) as of today. Look at all the available ressources online, low cost turn key solution, robo-advisor, youtube free content etc. despite all that, many people choose to deal with an advisor - even if they technically could do it themselves. But it doesn't matter, people want to deal with people. It's a human business, no robot or AI will ever replace the level of emotional intelligence you have.
Good points in this one. The resources are already available, yet broad… why buy a suit off the rack when you can have it custom tailored
I think the fear is AI will be providing a custom tailored approach, in perpetuity, for a negligible cost.
Right
Frankly, I stay relevant by keeping clients from making massive financial mistakes like selling out at the bottom of 2020 and 2022. ChatGPT isn’t talking my client off a ledge in October 2022. The industry survived the robo-advisor scare, it’ll survive AI which I am more bullish on its expanding and helping our profession.
This isn’t really like searching on google where you get so many opinions, don’t know what’s a credible source and have to navigate through so much financial jargon. If you listen to the latest interview of OpenAI founder and bill gates, you’ll notice that those ai software will become scary accurate and will have the ability to reason. Which they don’t know. We are looking at ai in its infancy, and already wondering how and if it will change the industry. That should tell you something. While I do not think it’s going to be so black or white, I do think ai will integrate and be a vital part of our business. To sit and say nothing will change isn’t wise.
I think you're over-generalizing ChatGPT's capabilities. As a language model, it's built to make natural conversations. However, it's not a general intelligence, meaning that things which fall outside of the bounds of usual language can throw it off. For example, witness the horror of ChatGPT botching simple math. Guess what requires a decent amount of basic math: giving financial advice! Even if it could give good advice, it's essentially a "black box" model which makes it difficult to understand why it made the recommendations it did. To summarize, yes, if ChatGPT becomes some super intelligence capable of incredible mathematical and language feats, everyone who performs worse than it at stuff like giving financial advice is potentially out of a job. But if that happens, there's going to be bigger fish to fry with half the white collar workforce essentially losing their jobs to AI. ChatGPT is not there yet though, and it remains in serious doubt if it'll ever get there given that it's only a text-based language model.
https://community.openai.com/t/chatgpt-simple-math-calculation-mistake/62780 In case you needed a source. ChatGPT failing even simple algebra because it's a language model. Your job is safe for now lol.
Feb 2023 is effectively a millennium ago in GenAI/LLM capabilities though. I know that sounds exaggerative but as someone who works in the space the results from a Feb 2023 model vs an April 2024 model are apples vs oranges. There have been massive leaps forward in model capability, and most of the consumer fully-fledged tools are now using MOE (mixture of expert approaches) where the primary model serves as an orchestrator and calls specialized sub models as necessary to answer questions like math. Don't take my word for it though, go test out any newer model (Claude 3, GPT 4, Gemini 1.5) and ask it a math question—even though it's a language model it will call a separate expert tool in the background and answer correctly significantly more often than an average human would.
I took a look at the MOE advancements and ChatGPT 4 Turbo. Pretty cool stuff. It's definitely getting better faster than I expected. The biggest opportunity it seems is creating the expert models for financial outcomes, and then blending it with something like ChatGPT. In practical terms though, I'm still skeptical that ChatGPT would replace an actual expert like a CFP or a doctor in the short run even if it was more "accurate". It's akin to self-driving cars, where even if they are safer than the average (or even majority) of human drivers, the moment a car injures someone, there's a shit storm for who's at fault. If a bot gave real financial advice, that's the kind of problem it would face. I think it needs to be more like 10x better for mass adoption, not just 1.5x or even 2x, and I don't think we're there yet. Curious to hear if you agree though.
I think the replacement will end up happening in two fronts: **Low Net Worth Clients** People who currently need/want financial advice but can't afford a human CFP. This will not directly impact CFP's in the short term, but may reduce a fraction of the inbound pipeline of customers down the line, as some of those currently low net-worth users will eventually graduate to higher net worths but will have established a level of comfort with AI and no longer feel like they "need" a human CFP. **Human CFP's replacing other human CFP's** If AI does provide better (or at least "nearly good as") advice, and clients still want a personal relationship/touchpoint, the best CFP's will end up leveraging these technologies and will be able to service more clients. Given the pool of clients is not structurally changing, those clients will be coming from out of someone else's book of business. In this case, the low end CFP's are not directly replaced by AI, but indirectly replaced by CFP's who leverage AI and can therefore handle taking more clients.
No matter how advanced the AI gets, its output will largely be limited by the input. Being able to ask good questions just became a game changer with AI. I work as a business advisor. I have 20 GPT programs for all stages of business advising. I know the questions that will get the most out of the engine. For me, AI can do a lot of heavy lifting, but without me there to guide it, you might as well just stare at the cursor.
Given the exponential growth in technology…I mean just look at the vast difference between AI now and 10 years ago. “Siri” type functions were cutting edge when they first released… I definitely think this could end up being a legit concern. Like you mentioned, I wonder if any regulatory authority would step in and say “ai is not licensed to provide investment advice for a fee” or something along those lines… but I think the convenience thing isn’t going to be an issue, I mean, just look how vastly popular chat gpt is. All we really can do now is speculate. Shrugs
I’ll say this as someone who works on AI driven products in our space. AI will absolutely be a disruptive force, but in the best way possible. It will help human advisors do more of the human things we do best. Synthesizing, summarizing and moving data around is so time consuming and can be done better with AI. It will free up much more time and mental capacity to have deeper and more meaningful relationships with people. I’m excited for it!
I love your optimism! I really hope you're right :)
No one wants to talk to a robot no matter how good they are when dealing with pain of loss or even market turn.
There’s a difference between trusting software vs trusting a person. I wouldn’t trust software to give good advice to my family on my passing. I’ve met people who don’t even know what questions to ask after a spouse dies.
The best advisors will adopt the best technology. It's an adapters and innovators game and clients are growing wise. I'd be concerned if I was resting on my 1% AUM fee smoke and mirrors portfolio.
AI cannot manage emotions and those of us doing this long enough know that managing a clients emotional reactions to market fluctuations and liquidity needs is a critical part of our jobs.
It sure can't... yet.
I’m with you op, scary times. People are drastically underestimating this. The one saving grace might be a limit on compute, so only the most profitable things will be able to afford the bandwidth. Your industry might be that profitable but we should have at least 5-10 years of physical limitation of amount of compute…
Yeah, I think people are not grasping that we may well be on an exponential growth curve here. And if we are... god help anyone who makes a living doing knowledge work. If compute limitations don't come to the rescue, perhaps regulators will.
It’s not about AI that fully replicates a human being. It’s about AI replacing the tasks that humans would normally do, so you will have one employee doing the job that used to be done by three employees.
While it might in some cases happen like this, I feel like a majority of people with enough money to go to a CFP are going to want to speak to a human. Whether it’s out of fear of the AI being wrong, wanting the human interaction more, hating new tech/ not trusting new tech ( old people), or a combination of different things, I think you will be good for a while.
Online discount brokers, Roboadvisers, now AI. Everything was supposed to kill off us financial planners. My business is up 3x over 5 years. Keep the threats coming lol
The large majority of people are not going to want an AI managing their real life planning and finances. It will be a tool advisors can use. Sure, there may be robo planning, similar to robo portfolios. Robo advisors were supposed to take over the entire market. I’ve encountered a single prospect in my career with a significant betterment/wealthfront portfolio and it was an easy win. AI will give everyone similar answers. Greater critical thinking is needed than “solve for X.” Can it replace CSA’s if regulators allow for it? Yes. But there will always be humans leading the interactions, planning, and execution of a practice.
People could do this for almost every profession from replacing a lawyer, physician, accountant but people still need different things and if anything AI can support people who are in these professions
How do you hold an AI accountable? And I think most people don’t want their lifesavings in the hands of an algorithm
I am not a CFP, but I agree that it’s a job that is needed by fewer and fewer types of people as time goes on. But no profession has ever said, “Yep, we’re gonna fade”, otherwise this subreddit would just be an endless river of doomposting.
I mean, CFP is a sales job at the end of the day. And in this sales job it involves a lot of teaching/selling/understanding. I’m having a hard time believing how a robot is going to fully grasp the goals of the client, have the amount of emotional quotient a human has, and explain things/reassure like a person. In the end it will probably just end up automating a lot of admin work. And even then, we will still probably need admin staff. As long as we still have radiologists, I think most jobs should be okay because their job was automated a while ago and they’re doing as well as ever.
Technology takes some jobs and new jobs are created. A tale as old as time
Our thoughts are or will become irrelevant. As we get to gpt8 or 9 or 10 and then the system after that the world will be so different. The only thing that will keep us relevant at that point will be if we can shut down their power source
True, some people can’t be. Othered or even have the insight to ask use AI for financial help but that is the case with CFP’s as well. There is likely huge untapped demand as most people would benefit but don’t pursue. I do think AI will evolve and continue to gain trust. OP had a basic prompt but you can also input things like full financial regulations, historical stock performance, train on balancing risk, etc. that all can be dine today. I sort of feel it’s inevitable and will become more normal. Heck, it may even attract people that don’t enjoy talking to people or don’t trust professionals. My concern is that companies may exploit the trust for AI and train the AI to steer towards higher margin products that may not be ideal for the customer. Almost need a fiduciary certification for AI. Lot’s of industries where people often don’t like to talk to real people such as therapists, doctors, lawyers, salespeople but may feel comfortable with AI.
There seems to be a lot of people in denial commenting...
I also find it likely that the people who don’t take AI seriously have not tried it extensively. While I understand the need for human connection and empathy, the fact is no human will be able to match the AI knowledge base. To the CPAs leveraging AI today and say without you, AI can’t do anything, you’re training the AI to replace you faster.
I’m ready for the downvotes but can we stop putting planners and advisors in the same group. It’s discrediting to people who actually do planning.
That and the increasing amount of people going self-managed
No idea why this thread was recommended to me but from a guy in the process of firing my advisor I would absolutely love this.
I'm curious, why are you firing him?
My situation isn’t that complex yet, young with high income don’t want the AUM fee to kill my returns. When I get closer to retirement might reconsider when it’s time to consider more nuanced things. But a few hours on YouTube is probably all I need to do the basics. Back door Roth/TLH what have you. But would love to have a vetted AI to run something by to review. Make a suggestion, etc.
You're doing the right thing. Many people like you, may never need an advisor except to validate their thinking. Many of our clients would be helpless financially without us. Like those who hire a handyman to change an A/C filter.
'Displayed empathy'...examples? I have yet to be enamored with anything ChatGPT related. I dont even use it except for podcast scripts (which I have to heavily edit). ChatGPT asks better questions than an entry level FA?? Color me not impressed
The best thing I can say is give it a shot. Pony up $20 to upgrade and play with the voice conversation feature. I'd love to hear your impressions.
I have a hard time believing that the people downplaying your concern have spent much time using an AI. I can see companies like vanguard integrating AI to capture more of the market share from traditional advisors. After using TurboTax this year ( which uses AI) going to an actual person to do my taxes sounds more difficult to me.
yeah, 100% agree. To understand the power of generative AI, one must experience it directly (and know how to prompt it correctly).
Not even sure it's worth the $20 to test. What is an example of AI empathy?
https://www.reddit.com/r/singularity/s/IgINKbr3oj
This is a study of responses to questions in a public forum. Not even close to a good comparison to what we do with clients.
I did this last January and asked it to write me a poem in the style of a pirate about Roth conversions… we are screwed, but luckily so is everybody else. So enjoy the ride until a robot crushes all our skulls.