The Garrulous Jay – Optimistic Intelligence Too

This week AI has been very much in the news in connection with the business of financial planning. Overall, the two areas discussed below left me feeling more positive than negative.

Yesterday The Observer published an article under the headline, Don’t trust ChatGPT’s pension advice. It’s likely to be double Dutch.

I thought it only fair to ask ChatGPT to summarise the piece and here’s what it had to say: “The article warns against relying on ChatGPT for pension advice because AI can misinterpret specific pension details, use incorrect data sources, or generate plausible but wrong answers. It highlights examples of errors and urges people to verify information with their actual pension scheme, HMRC records, and official tools for accuracy.”

As The Observer article warns, “When AI struggles…it either searches for generic information from similar-sounding schemes or simply makes up the advice based on what sounds plausible.”

For those of us working in financial planning, there is no room for complacency, but to me this demonstrates the importance of advice.

Not only are the answers from LLMs like ChatGPT only ever as good as the questions asked, but they often require an expert eye to understand them and spot where things are misleading or wrong.

I should say I am an enthusiastic user of LLMs, but it is dangerous to take their output as gospel. This week I queried an answer ChatGPT gave me, only for it to say, “You’re right to challenge that. The opening line – no, not in full – was inaccurate given the facts you provided”. QED.

The other event saw wealth management companies’ shares under pressure on both sides of the Atlantic. Here’s ChatGPT’s summary as to why…

“Wealth management stocks fell after US platform Altruist launched “Hazel”, an AI-driven tax planning tool. Hazel analyses clients’ 1040s, paystubs, statements and adviser communications, applying tax logic to generate personalised strategies within minutes. It also offers interactive “what-if” modelling to test events such as bonuses, home sales or retirement. Shares…dropped on fears AI will compress fees and disrupt advice models. Commentators warned more volatility may follow, although some analysts described the market reaction as knee-jerk rather than evidence-based.”

What is interesting about this is that Altruist is a platform designed specifically for financial planners with the goal of making them more productive. As their website advertises: “Run your firm your way with an AI-forward custodian that brings account opening, trading, portfolio management, billing, and reporting together in one place.”

With this as context Hazel itself is intended to be “your new client relationship assistant”. In other words, it’s a tool that’s designed to enhance the speed with which high quality tax planning can be done with greater insights and fewer mistakes. Ultimately this should allow planners to spend more time building relationships with more clients with better outcomes.

I struggle to see this as being a negative for the industry and I look forward to tools like Hazel being available in the UK.