ChatGPT has taken the world by storm revolutionising the way we live and work. The chatbot’s advanced Artificial Intelligence (AI) abilities allow it to write articles, create videos and images and dish out advice on any questions you may have.
It seems everyone is jumping on the AI bandwagon. As we are living in a world of immediate gratification, this is only to be expected.
According to a survey done by CNBC in September 2023 on asking ChatGPT for financial advice, 37% of adults are interested in AI tools to manage money. It also found that 11% are “very interested” and 4% already use AI tools for money management. These numbers may sound insignificant, but keep in mind that we are looking at a more than one-third reduction, with regard to potential clients for human financial advisers.
ChatGPT’s advice versus a human adviser
We explored how ChatGPT’s advice compared to that of a human adviser by asking one of the most common questions clients have for financial advisers: How much should I save for retirement?
In answering, it addressed the various important factors including age, lifestyle and retirement goals and some general guidelines to consider. It crunched the numbers and gathered data more quickly than any human. There is also an opportunity to ask follow-up questions for more detail on the answer. It has the potential to shave hours off the financial planning process at no cost.
Question:
If my value as a financial adviser is based only on providing my client with the numerical value as seen with ChatGPT, should I be concerned? Even worse, can the fees I charge justify the value I offer my clients?
The answer lies in taking a very different approach to the retirement planning question and engaging with your client in a manner that is not possible for any AI tool. Instead of focussing on retirement from a financial point of view only, approach it from your clients’ vision of their goals and aligning their emotions with their desired outcomes.
Irrespective of how well a financial plan is constructed, the plan is only effective when clients buy into it and implement the relevant actions. They will only do that when they have been part of the planning process and can relate to it.
It is important to remember that retirement savings goals are not a one-size-fits-all. Clients need someone who can help them articulate and simplify their retirement needs based on their individual circumstances and goals.
This is done by adopting a behavioural coaching approach, asking questions to help your client find the best solution for themselves, through exploring and unpacking their aspirations for retirement: -
• What does retirement mean to you?
• What dreams or goals do you have for your retirement?
• What have you done so far to achieve them?
• What could stop you from achieving this?
In a nutshell
If you are looking simply for directional advice or to learn more about retirement, ChatGPT can deliver — and it is simple to use and free. However, it misses the mark with its lack of context and ability to include various key emotional factors.
As a financial planner, you navigate your clients in making the right decisions about the most important things in their lives, like retirement, buying a house, funding education for their kids or starting a business. These conversations happen over the course of a lifetime. They are deeply personal and can definitely not be answered by just asking ChatGPT. It falls short in providing the personalised guidance, emotional support, and appropriate understanding that only human advisers can deliver.