JPMorgan Chase made headlines after it filed a trademark application for a new artificial intelligence invention that would select investments for customers.

While the firm's app is innovative, financial planners have already integrated AI into their day-to-day work.

Some use it for marketing and client communications, other use it for tax planning. While AI poses several potential risks, these planners ultimately think it makes them more effective in their work — but not so effective to eventually take over.

"I think it will enhance the industry," said Grant Meyer, founder of GTS Financial, said of JP Morgan’s new technology. "I don't think at this point in time especially, that it's an outright replacement for advisors."

How AI helps financial planning

"Internally we are big advocates of using technology and allowing it to better serve our clients," Meyer said.

His firm employs artificial intelligence for marketing, using the software to draft the firm’s newsletters, social media posts, and blog posts. He also uses it to draft bullet point responses to basic client questions such as the difference between IRAs and Roth IRAs.

"It spits them out and you can use that as a quick building block for an email…cutting down some of the response time," Meyer said.

In one instance, the firm even used the AI to help create a three-day trip itinerary for a client.

"So internally, we've been using AI to … speed up rather than searching on Google and trying to find articles,” Meyer said. “AI has kind of been very additive in how we work with clients."

Kevin Brady of Wealthspire Advisors relies on ChatGPT to "think through some tax-planning strategies and tips for attorneys and other high-income professionals." He also uses it to simplify his writing.

"Along similar lines, for a past article, I used ChatGPT to edit my writing to a more readable grade level," Brady said. "Simplifying complex topics is part of our job and that can be hard to do."

Brady added that he uses ChatGPT to answer basic client questions that he is repeatedly asked.

'In the past, it was a struggle at times to find a prior email answer I gave that I wanted to use or reference. Now, ChatGPT can give me a starting point to that answer, which I can include certain parts of and edit to adjust to my style and voice," Brady said.

AI shortcomings

Still, both advisors say that AI can pose challenges, at least in its current iteration. Meyer cited online reports that show large language models can be mistaken if not outright fabulist. For instance, he pointed to a story in which a lawyer submitted a brief citing six non-existent cases in a client's personal injury case against an airline.

"While some of the results of ChatGPT, Bard, and other AI programs can be shockingly high quality, we've all seen anecdotes on where they can fall flat on their face," Meyer said.

Brady agreed.

"I should add you definitely need to know the source material already, because ChatGPT can be wrong and its responses clunky," Brady said.

Brady said that ChatGPT is at its best when addressing "issues that have a clear answer." Otherwise, Brady said, it has limitations.

"It’s not good at areas that require nuance, or your relationships of things that are fluid," Brady said. "Correlation between asset classes changes every year. That's just one example. It can get super hard. Super hard. It's not good at delineating choices, because it's not its role."

Meyer also has concerns about data privacy, pointing out that ChatGPT is not confidential, though the firm recently unveiled new privacy options. Consequently, he doesn’t plug his client’s personal data into the software, restricting his firm’s AI tool usage solely to "non-confidential information."

"I’m assuming whatever information you plug into it is being used in some way shape or form and is accessible by a tech at the company," Meyer said, so he can't reasonably prove any client-specific information would be kept private, at least not at this point in time.

 

Not a replacement

Both Meyer and Brady argue that real-life advisors still play an integral part in the financial planning process. While artificial intelligence might assist with the more mechanical components of the job, they say human empathy still plays a crucial role in planning people’s personal finances.

"Money, we think, is all just kind of numbers in science and math," Meyer said. "There’s so much emotion charged with people's finances. And that's where, at least at this point in time, AI doesn't quite have it just right."

In a hypothetical, Meyer said a client might panic in a market downturn and opt for more conservative investment strategies. While AI might simply offer them those alternative strategies, a human adviser might reassure their client and urge them to stick to their long-term financial plan.

"And so some of the physical interaction with humans working through emotions that aren't logical…I think that's where people will still be involved," Meyer said.

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

"While AI's influence in the retirement planning space is in its infancy, I have no doubt that AI will help revolutionize the retirement and financial planning industry," he said. "I think AI will be the bridge between the vast amount of information and working with a planner one-on-one. AI will democratize financial advice and help provide guidance to the mass market at scale, which is hard to do as people."

But it’s not there yet, he said.

"To trust AI to coordinate your retirement after decades of saving is likely too big of a hurdle for most to overcome at this point in time," he said.

LeackStat 2023