Artificial intelligence has been around for some time now. However, its usage was very personalised. In November 2022, OpenAI launched an artificial intelligence chatbot called ChatGPT. Since then, ChatGPT and other rival models have pervaded our daily lives.
ChatGPT – Chat Generative Pre-trained Transformer – can solve practically every problem or complete any task on request. You may have read or heard about how ChatGPT passed the US medical licensing, law and business school exams. This news jolted the entire world and people started worrying about whether bots would replace them at work.
Even the financial advisory community felt similarly, wondering about the relevance of their roles. However, we are here to tell you why ChatGPT is less of a threat than perceived and why the human touch is the only recourse.
More than ‘ask me anything’
ChatGPT works on a user’s query – or prompt – and responds after drawing on the data it was trained on. For it to be accurate, you need to ask the right question.
In the case of financial planning, it is not just about savings and investment –numerous other complex issues are involved and cannot be ignored.
A financial advisor understands your needs, your income structure and your objectives and designs a portfolio that not only caters to your financial objectives but also takes care of your tax, liabilities and insurance requirements.
ChatGPT will only answer the queries you ask of it, without knowing what is essential for you. Moreover, in a changing economic scenario, your advisor will always prompt you to make appropriate changes to your investments.
Also read: When should you approach a financial advisor?
Opinion versus advice
ChatGPT is a platform that can answer questions from any field. However, to ask the right questions, you must thoroughly know the topic.
Imagine a law graduate interviewing an IT professional. ChatGPT is a knowledge platform that shares only that knowledge it deems fit at that particular time. This may well be termed as more of an opinion than advice.
Moreover, financial advice varies from person to person because each individual has a different set of liabilities and objectives. This very criterion is overlooked in ChatGPT, which provides answers based on a one-solution-for-all methodology.
Also read: This is how you stay financially fit at each stage of your life
Emotionless, unreliable
An answering bot is a fascinating phenomenon in itself. However, with the uncertainties of life, you cannot rely on a manmade machine. Bots or AI, no matter how refined, lack emotion and as a result, their suggestions may be a little impractical.
Therefore, in situations such as a medical emergency, the death of a dependent or while taking an emotional decision such as buying a house or car or planning a wedding, ChatGPT might not be able to grasp the sentiment associated with the occasion.
Imagine asking a foreigner about the importance of Diwali shopping. Financial advisors are humans and they understand the values of society. They can help you by suggesting measures, in keeping with your emotions as well as your financial objectives.
Also read: Personal Finance: How to build trust in your wealth advisor?
More approachable
In case of emergencies, people provide a helping hand more readily than AI. Financial advisors can guide you at every hour, so leave your financial troubles with them rather than a chatbot.
AI can only point to what you need to focus on, but the entire work will have to be carried out by you. Financial advisors can immediately initiate transactions at their end and let you focus on the emergency rather than worry about finances.
Financial advisors understand emergency situations far better than AI tools – mere guidance is not sufficient help at such times. Moreover, financial advisors will also guide your more effectively than an AI bot. Imagine your spouse asking an AI tool about your term insurance or health insurance details and unable to locate the same.
There is still a huge leap required in AI technology, but we have started to witness history in the making. Artificial intelligence is fast, accurate yet emotionless, whereas humans are slow, inaccurate but brilliant in terms of execution.
Also read: How many financial advisors should you have?
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