Financial Advice NZ chief executive Katrina Shanks says advisers are testing the AI tool by putting in questions about financial advice and doubting what they get out.

Given that is the general view, Shanks believes ChatGPT will not be widely adopted in New Zealand by mortgage and financial advisers because it is too unreliable.

“What it produces is not necessarily based on facts. It is useful only as a reference tool.”

However, she says it is good for mortgage and financial advisers if they are short of ideas and the right words to use for publishing basic information, but as professionals they need to apply their own advanced knowledge when sending material to clients.

Asking specific questions

Auckland-based registered financial advice company National Capital is one company that challenged ChatGPT to generate financial information that any regular Kiwi could and published its findings. 

KiwiSaver advice is National Capital’s specialty so it wanted to see how the AI would stack up against registered financial advisers. ChatGPT was asked specific questions and came up with some incorrect answers. To be fair, says the company, every financial statement made by the chatbot was followed by a reminder to seek professional advice.

Nonetheless, National Capital says it can see the added risk of inaccurate information, despite its dangerously authoritative wording. No one should rely on the information generated through ChatGPT as financial advice, it says.

“There is also a lack of quality and depth in the answers generated by ChatGPT. Granted, it is great to summarise heavy content in plain English.”

Rapidly developing

Across the globe, artificial intelligence is a rapidly developing field poised to revolutionise everything from healthcare to transportation and entertainment to finance and mortgages.

At its core, AI is about using computer algorithms to mimic human intelligence. This can include everything from recognising patterns in data to making decisions based on that data.

ChatGPT created by Microsoft-backed company OpenAI has quickly amassed millions of users and been praised by business leaders, including the billionaire Elon Musk who tweeted: “ChatGPT is scary good. We are not far from dangerously strong AI”.

While most of the excitement focuses on its ability to produce text, its major business impact comes from its ability to understand that text.

What separates ChatGPT from powerful search engines such as Google and knowledge repositories like Wikipedia is its capacity for knowledge synthesis – or the ability to identify, appraise, and link information to distil and present arguments, says Michael D. Watkins, professor of leadership and organisational change at the International Institute for Management Development (IMD).

Global bank spreads the word

Already multinational investment management and financial services company Morgan Stanley, with more than US$4.2 trillion in customer assets, has tested the artificial intelligence tool with 300 advisers. It intends to make it broadly available in the upcoming months.

Morgan Stanley has been developing a ChatGPT tool for the past year to make it easier for the bank's 16,000 advisers to access its vast collection of research and data. According to the bank’s head of analytics, data, and innovation Jeff McMillan, the tool is like having its chief strategy officer sitting next to an adviser when they are on the phone with a client.

Users have been astounded by generative AI, which has spawned a race among tech titans to create new products and dazzle users, but some users have been led down unexpected pathways. ChatGPT occasionally "hallucinates and can create responses that are superficially compelling, but are actually wrong", Morgan Stanley analysts noted in a report last month.

Complex

McMillan says while workers worry that technology advances will eventually replace people completely, every industry is going to be in some way disrupted for what he describes as routine, basic tasks.

Many in the financial industry say while advanced language models like ChatGPT can play a role in the mortgage and financial advice industry, it is unlikely that they will entirely replace human advisers. The consensus is that financial advice is a complex field that requires expertise and experience, and human financial advisers are still the best option to provide the tailored advice that clients need.