AI chatbot, ChatGPT, is creating sensations and breaking barriers in different industries, and even giving financial advice to people. But can it really replace human financial advisors?
What is ChatGPT?
A ChatGPT or “chat-generated pre-trained transformer” is an artificial intelligence (AI) program that was created by OpenAI in December 2022. You could ask it a question and it will give you an answer.
ChatGPT has been used to text people, write essays, articles, find answers to complicated existential questions, solve analytical problems, or even give generic financial advice.
However, ChatGPT is not ‘intelligent’ enough to replace a financial adviser.
According to ChatGPT itself, it can only provide generalised information and not personalised financial advice tailored to specific requirements.
On being probed on its competence to provide tailor-made financial advice, ChatGPT said, “As an AI language model, I have been designed to provide information and answer questions to the best of my ability based on the data I have been trained on. However, I am not a licensed financial adviser and cannot provide personalised financial advice tailored to your specific situation. I can provide general information and resources related to personal finance, but for specific advice regarding your financial situation, it is always best to consult with a qualified financial professional who can take into account all of your individual circumstances and goals.”
Hence, despite its advancement, here are five reasons ChatGPT cannot be a financial adviser.
- Financial planning is personalised
Financial planning is always personalised and is designed on the basis of questions and answers provided by the adviser and the client.
Mr Anant Ladha, Founder of Invest Aaj For Kal, a financial advisory firm, said, “Financial planning can be completely different for two persons of the same age and same financial background. So, ChatGPT can provide the basic rules and pointers, but for proper planning, an adviser will be needed.”
- Emotional management
Managing emotions that arise out of financial decisions is beyond the scope and competence of an AI chatbot.
Mr Ladha said, “Even if you have all the rules written, the majority still won’t be able to stick to those rules if there is no regular counselling. Good financial advisers need to ask questions and provide solutions to their clients based on needs, values, goals, and important relationships with them.”
- Unable to help you set realistic goals
Based on one’s current circumstances as well as the facts that a client provides to his/her financial adviser, a human financial adviser can help clients in achieving realistic goals that can be navigated and achieved smoothly. An AI machine will not be able to help with that.
- Unable to provide in-depth solution
ChatGPT only has the information that you will provide at the beginning to start off the conversation. It won’t ask you further probing questions about your finances.
Since all its analysis and advice are based on half-baked information, it won’t be able to guide you in the right direction, which a human adviser would always do. There is always a major gap in the information required to reach the solution best for your clients.
- No accountability or ability to adjust
An AI machine will not be accountable for the advice it gives to clients. Nor can it readjust the plan provided based on their circumstances. There could always be situations wherein your clients need to simply reroute or refresh their plan. A human adviser will be able to help clients with this, an AI chatbot won’t.
This is an abridged version of an article by Meghna Maiti which appeared on Outlook.