Given the many, many ways that ChatGPT and other AI are inundating the news cycle - it was only a matter of time before we had to write about it. While AI has been around for a long-time, it seems we've hit a critical mass - and perhaps passed a computing threshold that has now allowed AIs to be much more specific and accurate. But could they be a substitute for an investment advisor, wealth planner, or Certified Financial Planner?

 

The short answer is kinda. The long answer is, not really. I spent a few hours asking a couple AI systems a series of questions about personal finance and creating a scenario for them to respond to. Most of the responses to my questions seemed pretty reasonable on the surface, albeit with a few issues. For background information it was very good. For personalized direction, it was challenged. From these initial experiences I've identified a few things to consider before you ask an AI how to manage your financial life.

 

1) Is it up to date? A popular AI I used lacked information beyond 2021. This can lead to the AI model not knowing about new account types, updated tax rates, and changes to tax legislation that would impact decision-making. Ultimately, these models can only respond to the information that they can access - and if that information isn't up to date, then it will have trouble. I think this should be an easy fix but we should always try to understand what data the AI model is relying on, so that we can properly interpret the conclusions it draws. Also a good idea to better understand real, live humans.

 

2) Does it ever make mistakes? The AIs I used occasionally applied rules incorrectly, and in one instance doubled income.There are instances of AIs being outright wrong, or fabricating information altogether. From the questions I asked, at least the mistakes were generally small and could be easily corrected. Of course, advisors make mistakes too but most will double or triple check their results before presenting to clients, and one of those checks is simply "does this feel reasonable?" Regardless of whether the output comes from your calculator, a deep-learning AI, or an advisor, ensuring the results feels reasonable should be the first step before you take any action.

 

3) Does it have all of the information about you? Just like weather systems can do a pretty good job at predicting overall weather patterns and general trends in the area, they can't tell you how much it will rain on your specific house. This level of personalization just isn't possible from an AI because it doesn't know you. Perhaps if you put in every financial data point of your life it might put together a good guess. But it still wouldn't ask you questions like, "What lessons did your parents teach your about money?", or "How would you feel if you lost half of your savings?". Personal finance, is inherently that, personal. Whenever we interact with an AI we need to understand that the AI is doing it's best to respond to it's best approximation of "people like you" but it can't really understand "people who are exactly you". 

 

In our industry we often pride ourselves on our technical understanding, but perhaps it is our essential humanity and desire to understand each other that is what makes us really valuable.

 

If you would like to make a real connection and have a real conversation with a real human, please reach out today.

 

 

Cheers, 

Peter Galbraith - Investment Advisor, CFP

613-531-2922

peter.galbraith@cibc.com