ChatGPT: Can you trust its financial advice?

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What would Victor Hugo say about a robot that can write a complete novel in just a few minutes? He’s definitely turning over in his grave! And yet, that's just one of the (many!) things ChatGPT can do. This tool, which was launched in late 2022, is both cause for excitement and concern. So, we’re interested in learning more about its financial acumen. Will this new robot replace financial advisors? Can it help you plan a comfortable retirement? Maybe one day, just not today.

ChatGPT, a new jack of all trades

First things first, what is ChatGPT? It’s a tool. Its name is short for Chat Generative Pre-trained Transformer. Some would refer to it as a conversational robot. But it's much more than that. ChatGPT was developed by OpenAI, an American Artificial Intelligence Research Laboratory, to generate content in any format. For example, it can:

  • Design a game
  • Write a song
  • Help you prepare for an interview
  • Help you learn a new language
  • Offer relationship advice

This new robot is not just a one-trick pony.

Every action it is asked to perform is an opportunity for it to ‘learn’. Whenever it is asked a question, it hones its skills, becoming increasingly precise. The more people use it, the more powerful it gets. It can parse a staggering amount of data from a variety of sources, like journalism, literature, film and even online conversations. It’s no wonder that it can generate coherent texts in a wide range of styles. It seems to be able to understand questions and generate compelling content... at least on the surface. ChatGPT has its limitations, though, which cannot be ignored.

A robot with robot limitations

ChatGPT's biggest liability is that it's not human. Even though it seems capable of producing intelligent thought, it merely pieces together answers without considering:

  • Context
  • People’s feelings
  • A person’s situation

It cannot think. It’s not creative, and it lacks perspective. These are the kind of qualities that are important in a financial advisor!

A master of recapitulation and summarization, ChatGPT struggles to provide explanations on specific subjects and fails to take context into account. And context is everything! It’s also important to keep in mind that if the data it parses is biased, the answer it gives will be biased. A number of studies have shown this. On the bright side, ChatGPT is rather humble because when asked if it can replace financial advisors, it doesn't hesitate to say no!

Now, this will probably come as a surprise, but the world’s most famous robot agent doesn't yet have access to the Internet. Nope! It relies on its immense data warehouses to answer questions. This means it can't really provide accurate, real-time information. No stock market insight, no gold prices. What this means is that basic investment information is still out of its reach. But as you can imagine, its inventors are working hard to integrate this function in the near future.

ChatGPT is in constant evolution. What it looks like today is not a predictor of what it will look like tomorrow. Yet, even in its future iterations, this conversational agent will be limited in anything that relates to human expertise. Nothing can replace the intelligence, emotions and experience of experts in their field.

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Irreplaceable, that’s what financial advisors are

Artificial intelligence may be able to provide information on a variety of subjects but it will never match that of financial advisors. They understand you and the kind of investments that are right for you. They can accompany you through the major stages of your life, from buying your first home to retirement. Unlike ChatGPT, they take your investor profile into account and protect you from flavour-of-the-week investments. Thanks to their empathy, experience and ability to listen, advisors are here to help you grow your money stress-free.

In an increasingly complex financial market, you don't always know who to listen to. Advisors can serve as your compass for navigating the intimidating world of finance. Plus, studies show that doing business with one makes your assets grow faster. This is where the expression ‘combining business with pleasure’ takes on its full meaning!

Saving with a little help

Who doesn’t want the big house, the extravagant vacations, the best for their children as well as a carefree retirement? ChatGPT can generate a generic savings game plan, but nothing specific to you. Lifestyles and wishlists are not one size fits all. It’s therefore important to get advice that is personalized to your situation, goals and ability to save.

What makes advisors or financial planners so valuable is their ability to show you how to manage your assets. Planners can draw up a personalized plan to help you stay on budget, identify tax incentives you’re entitled to and prepare for retirement. They’ll even help you with estate planning. You wouldn't let a robot perform a root canal on you. The same goes for your savings. They should be in the hands of a professional who understands you.

In short, the best financial advice ChatGPT can give is to refer you to our financial advisors. Savings and financial planning are essential if you want to achieve your dreams or enjoy a comfortable retirement. Robots belong in the movies. When it comes to financial advice, talk to a human being.