As artificial intelligence (AI) models gain traction across a number of professions, some advice practices have already adopted the increasingly popular chatbot ChatGPT to manage workflow and streamline processes.
But recent events have alerted industry professionals to the dangers of relying on AI and emphasised the importance of exercising caution when using certain emerging technologies.
ifa’s sister brand, Lawyers Weekly, recently published a story about how ChatGPT invented a sexual harassment allegation against a prominent American law professor.
The ability of ChatGPT to generate fabricated information has raised concerns about its accuracy in providing financial advice, prompting questions about its reliability in this regard.
Veteran adviser and managing director of Sambe Investments, Sam El Shammaa, told ifa that while he does believe chatbots have merit in improving efficiencies, their limitations should still be acknowledged.
“It’s important to note that while chatbots can be valuable tools for streamlining certain functions within practices, they should not be relied upon for all tasks such as SOA [statements of advice] creation,” Mr El Shammaa explained.
“Human interaction and expertise are still necessary in many situations, especially those that require empathy or creativity. It’s important to strike a balance between automation and human touch to ensure the best possible customer experience.”
In turn, Mr El Shammaa identified a number of challenges that advisers relying on chatbots are confronting.
Namely, he explained that data quality and privacy concerns are current and ongoing obstacles. As AI relies heavily on data to make accurate predictions and recommendations, the adviser conceded that ensuring the quality and accuracy of that data can be challenging.
“Additionally, there are concerns around data privacy and security, particularly as it relates to sensitive financial information,” he said.
Moreover, he pointed to AI-based systems as being, on occasion, difficult to interpret and explain, particularly when they make complex or unexpected recommendations.
This, Mr El Shammaa said, can make it difficult for financial advisers to understand how the system arrived at certain recommendations, which can limit their ability to provide effective advice to clients.
He also noted that compliance is becoming increasingly blurry for advisers adopting AI models such as ChatGPT.
“Financial planning is a heavily regulated industry and ensuring that AI-based systems comply with relevant regulations can be a challenge. There is a risk that AI-based systems may inadvertently violate regulations or fail to meet compliance standards.”
While chatbots can handle routine tasks and answer simple questions without the need for human intervention, these technologies are still being navigated with an air of scepticism. Perhaps, rightfully so.
Adele Martin, adviser and founder of My Money Buddy and the Savings Squad Podcast, told ifa that her initial reaction to ChatGPT was that it “sounded like Google”.
“I didn’t quite understand what it was. Furthermore, I was hesitant to adopt yet another piece of technology to add to my already extensive tech stack.”
However, Ms Martin conceded that, once adopted, the benefits of the chatbot were hard to ignore.
“I soon realised the potential time-saving benefits for both myself and the advisers I coach,” she said.
“For instance, by utilising the ‘rewrite this at a high school level’ prompt, ChatGPT has successfully removed a lot of jargon, resulting in clearer and more concise client communication.”
While Ms Martin said that the chatbot is “just the beginning of what AI can achieve”, she believes that such tools should be used with a grain of salt.
“While ChatGPT is a valuable tool, it should be used with caution when it comes to facts and financial information, as its data may not always be up to date or accurate.”
Turning to ChatGPT itself, the chatbot warned that not all of what it has to say — or more specifically, generate — is entirely factual.
“There may be times when my responses are not entirely accurate or complete due to limitations in my training or the complexity and ambiguity of certain topics,” the AI model responded when questioned about its ability to provide accurate information.
However, ChatGPT had more to say when asked about its limitations in assisting advisers.
“The accuracy and reliability of my answers and recommendations depend on the quality of the data and sources that I use. Financial advisers should always verify the information I provide and conduct their research and analysis to ensure that their recommendations are accurate and appropriate for their clients.”
Ultimately, the chatbot was transparent in cautioning users that it is “not a substitute for human interaction”.
“While I can provide valuable support and information, I cannot replace the human connection and expertise that financial advisers bring to their clients.”
