Will artificial intelligence replace financial advisors?

As technology advances, many industries are disrupted by new and innovative solutions.

Wednesday 11 Jan 2023 6:23 am

Artificial intelligence (AI) technology is used in many of New Zealand’s industries, including healthcare, finance, agriculture and transport. AI is being used in New Zealand to improve the efficiency of the agricultural sector, develop new financial products and services, and provide better healthcare to patients. AI is also being used in New Zealand to improve the accuracy and speed of decision making in various industries and to automate many routine tasks.

As AI technology advances, we will likely see even more widespread adoption of AI in New Zealand and other countries worldwide.

An example of a New Zealand company using AI is Fonterra, the world’s largest milk exporter. Fonterra uses AI to improve the efficiency of its dairy farms. The company is pursuing an AI-powered platform that uses sensors and machine learning algorithms to monitor cow health and productivity. The system collects data on factors such as a cow’s activity level, eating habits and milk production and uses this information to optimize the cow’s health and nutrition. This has the potential to help Fonterra increase the efficiency of its dairy operations, reduce costs and improve the quality of its products.

The financial advisory industry is no exception. A recent development that has caught the attention of many is the use of large language models like ChatGPT to offer an alternative to human financial advisors.

What is ChatGPT?

ChatGPT is a state-of-the-art natural language processing system developed by OpenAI that has caught the world’s attention and gained more than 1 million users in just one week. It is a kind of AI system that is trained with deep learning algorithms and huge amounts of data. ChatGPT is designed to understand and answer questions in a human-like manner, making it well-suited for tasks like providing simple financial advice or answering customer service queries.

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Unlike traditional AI systems, which are often limited to a specific set of predefined answers, ChatGPT can generate unique, original answers to a wide variety of questions. This makes it a powerful and versatile tool for many different uses.

So can AI like ChatGPT replace us?

AI products like ChatGPT can understand and answer even complex questions in a human-like way, making them a real alternative for financial advice.

One of the key benefits of using AI for financial advice is the potential to provide real-time advice. Traditional financial advice usually involves making an appointment with a financial advisor who may not be available when you request one! On the other hand, an algorithm is always available to provide advice 24 hours a day, seven days a week.

Another benefit of using such services to provide financial advice is that they can offer unbiased advice. All people, including financial advisors, have their own biases and motivations that may influence a financial advisor’s advice. Conversely, AI is powered by algorithms and data to provide objective, unbiased advice.

Of course, there are some limitations that prevent AI from replacing financial advisors. On the one hand, she is not yet in a position to advise on complex or special financial situations. Nor can it offer the same level of personal attention, empathy, and support as a human financial advisor. This last point is crucial as financial advice is about the trust that comes from getting to know clients and having them trust you based on your past interactions with them.

Overall, the use of AI to provide financial advice is an exciting development that has the potential to revolutionize the way we give and receive financial advice. While it may not be suitable for all situations, it offers many benefits including real-time advice, unbiased recommendations, and 24/7 availability.

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As technology advances, we will likely see more and more people turning to AI and large language models for at least some aspects of financial advice.

Tags: financial advice

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