Last week, ChatGPT’s parent company, OpenAI, announced the launch of a “personal finance experience” within ChatGPT, with a preview of the feature being released to Pro users in the United States.
“With your financial accounts connected, ChatGPT can combine that reasoning with your real financial context and what you’ve shared about your goals, lifestyle, and priorities, helping you spot patterns, understand trade-offs, and plan for big decisions in a way that feels more personal and complete,” OpenAI said on a blog post announcing the upgrade.
According to the post, ChatGPT can then help users spot patterns and plan for the future based on their stated goals, including investment risk analysis, essentially acting as a form of digital financial advice, albeit a rudimentary one.
“[This is a] net positive,” Ben Nash of Pivot Wealth told ifa.
“Having sat across the table from thousands of people figuring out their money, one of the biggest things holding most of them back isn’t bad information. It’s no information at all, or information that’s gone stale because they haven’t looked at it in three years.”
However, one simple reality remains: Australia has a vastly different regulatory framework. One that is far stricter and likely not as welcoming to the idea of what could amount to unlicensed financial advice.
Speaking to ifa, an ASIC spokesperson was relatively non-committal on the regulator’s stance on this new ChatGPT feature, stating, “ASIC recognises the great potential of AI across the financial services industry and supports responsible innovation”.
“The financial services regime is broad and technology neutral. Whether Australian laws, such as those relating to financial advice, apply to AI providers will depend on the facts and circumstances of their situation.”
In the past however, ASIC has implored caution when it comes to getting financial advice from a platform such as ChatGPT, highlighting AI recommendations are typically being informed by online trends opposed to more targeted advice informed by the user’s current situation.
Though, according to OpenAI, this feature will be more informed individual circumstances.
“Financial questions are personal, complex, and highly context-dependent. A helpful response needs to account for someone’s income, spending, balances, debts, goals, and timing, while being clear about uncertainty, assumptions, and when more information is needed.”
For some in the industry, including Ben Nash, there are doubts that ASIC would allow this feature to exist in its current form in Australia.
“In its current US form, I’d be surprised if it cleared the bar. The moment a tool connects to your bank data and starts answering ‘should I put the spare $500 a month into super or the mortgage’, it’s hard to see how that stays on the general information side of the line,” he said.
“That’s the territory of personal advice in Australia, which brings in financial services licensing, Best Interests Duty, statement of advice requirements, the lot.”
He explained how, due to Australia’s open banking system and tighter consent laws, any version of this feature that launched domestically would likely be a highly watered-down version of the version in the US, likely a slightly smarter version current banking app’s budgeting feature.
Speaking on a recent FAAA webinar, Insignia Financial head of experience design Glen Johnson repeated a similar sentiment, highlighting that if the technology was to cross into product recommendation, which if promoted correctly ChatGPT already does, then ASIC would be within its right to take legal action.
Nash added that if a watered-down version was to hit the Australian market, he doesn’t see it encroaching too deeply on the advice profession.
“The people who’ll happily use ChatGPT to look at their spending and ask about their super contributions are typically not the same people sitting in our boardroom paying $5K plus to get their whole financial life coordinated,” he said.
“Different audiences, different needs. The tool likely encroaches on a slice of the market that was unlikely to pay for advice in the first place.”
He explained further: “The bigger point that gets missed is that tools like this aren’t just for clients, they’re for advisers too. If your value proposition is ‘I’ll tell you what to do with your money’, AI is likely coming for that and probably should.”
“If your value is coordinating the moving parts, making complex decisions specific to one person’s situation, and holding people accountable to actually doing what they said they’d do, you’re in a much stronger position.”
At the time of writing, OpenAI has not announced any intention to expand this feature beyond the US market.
Does it prepare STATEMENT OF ADVICE ?
The ChatGPT debate is arguably already redundant in Australia given the laws around Personal Advice and Licensing requirements. However Ai is used for other more productive coding builds in advice.
Otivo an existing Australian Digital Advice platform is available for use by planners to get scale in advice and make advice more accessible for those who need it. It operates under an AFSL and issues SoA’s but does not recommend or offer products – it refers to the planner for that. This hybrid model co-exists and offers a regulatory operating environment whilst Ai is controlled by human outputs. worth viewing by every adviser in the country. Licensees will need to grasp it soon as it’s live and adding value to get scale way above the platform market targets of 130 clients per adviser.
disclosure of interest chair/shareholder