Asked if Australian financial advisers can earn commission, ChatGPT told ifa that commissions are a “common” form of payment to financial advisers.
“Yes, Australian financial advisers can earn commission,” the chatbot said.
“Commission-based remuneration is a common form of payment for financial advisers in Australia, and it involves receiving payment from financial product providers for selling their products to clients. The commission is based on the premium paid by the client, and the amount can vary depending on the product and provider,” it said.
ChatGPT went on to explain that in commission-based models, financial advisers receive “a percentage of the value of the financial products they sell to clients, such as mutual funds, insurance policies, and investment products”.
However, according to veteran financial adviser Sam El Shammaa (a human), the chatbot is misleading.
“Since the introduction of FOFA, commission is only available on insurance products and not on investments and super products. With the industry moving more towards a fee-for-service model, hopefully, the chatbot will eventually catch up and correctly report the landscape in real-time.”
ChatGPT is an AI language model developed by OpenAI. It is based on the transformer architecture and was trained on a diverse range of internet text to generate human-like responses to questions and prompts. The model has the ability to generate natural language text, answer questions, engage in conversations, and perform various NLP tasks. This entire paragraph was generated by the chatbot by asking it, “What is ChatGPT?”.
The following comment was not produced by ChatGPT. It can be attributed to Mr El Shammaa, who lives in Sydney and was contacted directly by ifa:
“Chatbot seems to have Shatbot itself on this one,” he said. “Like other search engines and sources of information, don’t always believe what you read. Use your own research skills. If ever in doubt, ask the question to your financial adviser.”
When asked what impact ChatGPT will have on financial advice, it had this to say for itself:
“ChatGPT has the potential to impact financial advice in various ways, both positive and negative. On the positive side, it can provide instant and personalised financial advice, helping people make informed decisions. Its natural language generation capabilities could also make financial information more accessible and understandable to a wider audience,” it said.
“On the negative side, the reliance on AI-generated advice could result in people making decisions based on incomplete or incorrect information. Moreover, the lack of human interaction and emotional intelligence could result in advice that fails to take into account individual circumstances and preferences. As with any new technology, it’s important to use it in a responsible and ethical manner and understand its limitations.”
ChatGPT needs to do its CPD.
This is a well known issue with chatGPT.
The current version of ChatGPT (January 2023) is only trained on *limited* data through September 2021.
Any schadenfreude or any limitations of chatGPY will be so short lived to be completely forgotten in a year or two.
ChatGPT is misleading because the sources it uses are misleading. I assume there is some sort of credibility weighting for the sources it draws on, and those such as ABC, Fairfax, and News Corp are rated highly. The problem is that all those sources are deliberately misleading and deceptive in matters relating to financial advice.
Doesn’t take a ‘chatbot’ just to get it all wrong. There’s still one particularly shouty person in the Australian media who proclaims from time to that that advisers get you to borrow against your house to charge percentage based fees on your ‘new investment’.