Beware: Small advice firms are about to be wiped out by ChatGPT

By AdviceBridge

ChatGPT has been making headlines since January. For those who haven’t been paying attention, ChatGPT uses machine learning to generate natural language text. 

Think of it as a souped-up version of Google search. In fact, in this instance, Google have had to run to catch up, and announced their own AI chatbot, named “Bard”, in the days following the early press attention around ChatGPT.

In essence, these AI chatbots generate conversational answers to your questions by drawing on content that already exists on the web.

How much power does this kind of AI actually hold?

While it may sound a bit Terminator-esque to suggest that this kind of AI holds the power to wipe out small advice firms, read on…

If you can ask it a question and it can analyse information – your CIP, for example – and draw conclusions and recommendations, then why have a human? 

If you cite Robo-advice’s downfall, then you need to understand the difference. 

Robo-advice is no competition to ChatGPT

Frankly, asking a few basic questions – which ultimately amounted to “how much can you save?” and “what’s your risk profile?” – before directing you to MPS6 is not advice. 

Being asked for all your financial details – including savings, ISAs, pensions, GIAs, contributions, mortgage, goals, objectives and so on – and then having it analysed with a recommendation of how your finances should be restructured is advice. 

Now that can be done. As can reviewing how the recommendation would change should you wish to retire earlier, or phase into retirement, for example. 

Currently, the interface is a human adviser. But what’s to stop that from becoming a “human-image” adviser, that you can interact with? 

Imagine linking ChatGPT into a system like AdviceBridge

We are only one step away from this – it wouldn’t be a massive leap to link ChatGPT into a system like AdviceBridge.

Unlike the current process which takes upwards of 10 hours, using AdviceBridge a recommendation can be provided within seconds.

Do you really think a prospective new client is going to wait six weeks while you onboard them and before you provide a recommendation when they can get the answer within 10 minutes?

What was (or is) Robo-advice, and what’s coming shortly, surmounts to a comparison of Wall-E versus the Terminator. 

Robo wasn’t “advice”, but ChatGPT could be…

Tim Sargisson did a great piece on why Robo failed and why he believes it will continue to fail. 

But unfortunately, he’s wrong. 

I agree that under the current/prior model, trying to engage a consumer to contribute more than a cursory amount is bloody hard. 

Ultimately, his argument boiled down to is it trustworthy? Taking the words out of Tim’s mouth:

“Advice is nuanced. There is no one-size-fits-all solution. The process involves many different steps. Every client is different. Their attitudes and requirements are unique.”

He continues: “With planning, this means establishing the client’s time horizon, attitude to risk and capacity for loss, capital or income requirements, and any ethical considerations. Once all of this is known, you can compare these to the current arrangements and formulate an action plan.”

And I agree with every word he says. 

Technology is already highly capable

However, technology, namely the AdviceBridge solution, can undertake all of this. 

Tim goes onto say, “Clients need to feel confident they are dealing with a knowledgeable adviser they can trust. Fortunately, for advisers, there is no app for that.”

But that’s not far away at all.

It only takes Microsoft / OpenAI to acquire a solution like AdviceBridge that can do all of the above and you have a robo-system that can undertake the same analysis as (if not vastly more than) a human in seconds as opposed to hours, days, or weeks. 

Interestingly, Tim says, “The integration of (human) advice with robo applications will be the driver for success. In other words, let technology take on simple tasks, automate them and use digital capabilities for support.” 

While I agree with him on this, technology can already take on much more complex tasks. Removing the word “simple” would be more accurate. 

In fact, his last quote niggles me. It conjures up the Henry Ford quote, “If I had asked people what they wanted they would have said a faster horse”. 

As much as I believe technology should only be used to support advisers, currently advice firms aren’t engaging with advanced technology enough to achieve some amazing benefits. Instead, most are probably only using 10% of the opportunity and power that technology can provide. 

Could we truly trust it?

But, coming back to Tim’s point, can it be “trustworthy”?

The simple answer is “yes”. 

If you can input your details and it make a recommendation across multiple elements, that is, keep some cash aside in case of x and y, amalgamate these two pensions on this platform, increase your pension contribution by x% and so on, then that already feels like a more knowledgeable and understanding suggestion than, say, stick all your savings in MPS6. 

Also, if you can then ask it what it would mean if you retired earlier and it provided that answer, re-running and adjusting the prior advice, then wouldn’t you get the feeling that it knew what it was doing? Especially if the interaction was with a nice CGI “human”.

Currently this functionality is available to advisers from AdviceBridge (minus the ChatGPT features), but it won’t be long before some large tech firm plugs it altogether and takes it direct to consumers. 

To return to the Terminator comparison: “It doesn’t feel pity, or remorse, or fear. And it absolutely will not stop, ever, until you are dead!”

AdviceBridge is enabling advisers to be prepared and fight back through their adviser supporting technology before “the machines” take over. 

It won’t be long before you hear the words, “I need your clothes, your boots, and your motorcycle.” And if you’re not prepared, that nice CGI “human” using ChatGPT may just win.

“The future has not been written. There is no fate but what we make for ourselves.”

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