Your IndustryMar 17 2023

Could ChatGPT replace advisers?

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Could ChatGPT replace advisers?
Google is tipped to soon launch a competitor to ChatGPT. (Cottonbro/Pexels)
ByRuby Hinchliffe

ChatGPT, an artificial intelligence chatbot launched back in November, has been labelled a threat to the financial advice profession - particularly for smaller firms.

The AI bot can answer questions on pensions, protection, investments and stocks and shares Isas, and experts reckon it is not long before the technology could deliver suitability reports.

But some believe ChatGPT could go further to disrupt financial advice, replacing smaller advice firms altogether.

Chief commercial officer at software firm AdviceBridge, Bruce Ely-Johnston, said in a blog this week (March 14) “it may sound a bit Terminator-esque to suggest that this kind of AI holds the power to wipe out small advice firms”.

But he said it won’t be long before a large technology firm plugs it altogether and takes ChatGPT directly to consumers. 

If you think this of no concern and cite robo-advice’s downfall, then you need to get up to speed and understand the difference.Bruce Ely-Johnston, AdviceBridge

Google is tipped to soon launch a competitor to ChatGPT, while Chinese tech giants have also been playing catchup to unveil rivals.

ChatGPT was created by the Microsoft-backed firm OpenAI, and this week its latest version ‘GPT-4’ was released, which claims to exhibit “human-level performance”.

“If you can ask it a question and it can analyse information – your CIP [central investment proposition], for example – and draw conclusions and recommendations, then why have a human?” said Ely-Johnston.

“If you think this of no concern and cite robo-advice’s downfall, then you need to get up to speed and understand the difference.”

Ely-Johnston described Chat GPT as a “souped-up version of Google search”, but rather than return a list of articles for you to click on each and read through, it reads them itself.

Most [advisers] are probably only using 10 per cent of the opportunity and power that technology can provide.Bruce Ely-Johnston, AdviceBridge

“It then pulls out the most interesting bits from each, combines them and then writes an answer to your query,” the chief executive explained.

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

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

Could a client trust ChatGPT over an adviser?

Ely-Johnston compared robo-advice and ChatGPT through the analogy of Wall-E and the Terminator.

While he argued that robo-advice ended up posing very little threat to the world of financial advice, much like the non-threatening Pixar character Wall-E, he reckons the disruption potential of ChatGPT better resembles a cyborg assassin.