AI for Advisors: Dos and Don’ts

Failing to use ChatGPT and other AI — or misusing it — can harm your practice, says Thrivent’s tech expert.

By Jeff Haines

It wasn’t long after ChatGPT started to dazzle the world with human-like skill at creating poetry, solving complex math problems and writing code that the age-old question arose: Is this the technology that will finally put human-based advisors out of business?

It will just make them better.

Over the past several decades, people have viewed every new technology around how money is managed and stewarded as an existential threat.

I remember giving a presentation to a group of top advisors in the 1990s about the changes afoot from inexpensive online trading. I highlighted an E-Trade offering that promised a free book, “Boot Your Broker,” and a month of no-cost trading for opening a new account. I even showed an image of the book to prove it was a real thing. At the evening reception, not one of the advisors would even talk to me. It turns out that I had scared them so badly that they couldn’t even bring themselves to talk about it.

Low-cost, self-directed trading has grown, but rather than put advisors out of business, it has highlighted the benefits of the guidance and wisdom they provide.

Artificial intelligence and ChatGPT will no doubt disrupt wealth management, but in a decidedly positive way. After all, AI is already embedded into most advisor tech stacks in some way, and that’s growing. At the recent T3 Advisor Conference, the talk was full of intelligent workflows and other new AI-related shiny objects.

Oooohs, ahhhhs and oops

We believe ChatGPT 4.0, will have a major impact on financial advisors and their businesses. The technology is truly amazing. ChatGPT 4.0 is a state-of-the-art language model with over 1 trillion parameters, allowing it to generate human-like text based on a vast dataset of internet sources. It can seemingly solve any problem thrown at it, which is why some industry watchers have opined that it can outperform the delivery of financial advice from humans.

In reality, beneath the oooohs and ahhhhs, there are a whole lot of oops.

Existing data privacy and intellectual property laws make blind usage very risky from a legal and regulatory standpoint. ChatGPT responses are not annotated, so you don’t know where any answers are actually coming from and what parameters were used. That means you run the risk of plagiarism. What’s more, ChatGPT occasionally “hallucinates,” or makes up data. That’s why many companies have momentarily banned the use of ChatGPT.

While ChatGPT may be an imperfect queen bee in an advisor practice, it is surely the most exceptional drone ever to work the hive. It will be important for financial advisors to understand this technology so that when it is approved, they will be ready.

As with all technological innovations, the focus must be on how these capabilities can improve the practice of the human advisor and help them better support their clients. In the short term, we see several areas where ChatGPT and other similar AI innovations will have the most positive impact:

Internal Practice Management

ChatGPT’s most probable implementation comes from how it replaces some of the more administrative and mundane task of managing an independent practice. Need to write a job description? Simple enough. Want a quick analysis of a potential tax-law change? Say no more.

The key in all that is that you have to check the work, so to speak. You would never want a raw ChatGPT analysis of a market-moving event to be sent out to clients, or even to be trusted by you at face value. Still, like a research report, it can provide a jumping-off point for your own analysis.

Select Client Communications

We think of the way we communicate with our clients by offering advice and guidance, and that can never be replaced by something like ChatGPT. Indeed, there are significant privacy and regulatory concerns about allowing ChatGPT to integrate with client data. As a rule, you should avoid using these technologies in any direct communication with clients that would otherwise expose their personal and financial data.

However, there are a surprising number of communications we provide clients that have little to do with our counsel. Take meeting agendas. These can easily be generated after you provide some basic commands to ChatGPT. Same with meeting summaries, and follow-up emails.

In fact, you can create client email templates that you can then personalize based on client communications. After all, it’s often so much easier to edit copy than start writing from scratch. ChatGPT can provide that boost.

Marketing Communications

If you’re using any form of digital marketing, you are already using AI. Most customer relationship management systems will tell you the best times to send emails, the right words to use in subject lines, and how to best organize your prospect database. ChatGPT will only make that better and easier to use. Again, beware of exposing personal information about clients, and focus instead on the content of your marketing.

But, let the seller beware: Marketing is one of those areas where there are significant red flags, namely in ChatGPT’s sixth-grader tendency to copy someone else’s work. Additionally, search engines like Google are on the lookout for AI-generated content, so, if you have a blog or are producing content in the hopes that search engine optimization will drive prospective clients to your site, you run the risk of being penalized during searches for using ChatGPT.

Your values and purpose cannot be replicated

Prospects and clients come to you for your unique experience, expertise, insight and trust. AI – or any technology, for that matter – is simply a tool to allow you to best serve your clients with values and purpose (two qualities ChatGPT can never embrace). As a result, the personal, values-based relationship between financial advisors and their clients can never be replaced. But ChatGPT and other AI innovations can certainly enhance that bond.

Understanding and embracing new technologies like ChatGPT can be a game-changer, providing a competitive edge in a rapidly evolving industry. If you haven’t tried it yet, check it out and experiment.

Jeff Haines is Technology Consultant at Thrivent Advisor Network, the independent registered investment advisor platform for purpose-driven advisors with shared values.

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