Funny story: I was recently trying to create an AI created image for a marketing campaign. This was my prompt: “Create a photo of a family of four enjoying a hike in the mountains with a tent and small smoldering campfire in the background.” This was the result…

Creepy huh?

In the ever-evolving landscape of financial advice, one can’t help but be intrigued by the growing influence of artificial intelligence (AI). Could it replace advisors, analysts, and asset managers all together?

With its remarkable capabilities and advancements, AI has revolutionized many industries. In the realm of finance particularly, it has proven to offer unparalleled benefits in ideation, data collection, and analysis. However, it is important to recognize that the best results are achieved when these kinds of tools as well as other technologies are coupled with the expert knowledge and skill of a human advisor.

I’m sure you’ve already interacted with an AI bot recently, whether you were aware of that or not. This technology has already taken root in wealth management. Let’s explore some of the benefits and limitations of these types of software, the vital role of human touch in wealth management and how that calls for an advisor-driven AI, rather than for AI-driven advice.

The Promise of AI in Financial Advice

The utilization of AI has revolutionized the way ideas are generated and nurtured and has impacted countless professionals across many industries. With its ability to capture and analyze vast amounts of data quickly, AI has already been proven to help identify patterns, correlations, and insights. This not only accelerates the process of ideation, but it enables the generation of innovative ideas, strategies, and opportunities.

As a financial advisor, I embrace the possibilities that AI brings to the table, recognizing its potential to enhance the client experience through expedited financial modeling, provide a matric of outcome potentials, and an array of supporting elements that can help us both, my clients and I, make data-driven decisions. It’s a no-brainer if I can leverage something to offer my clients a more refined experience.

However sparkly and shiny the advancement of AI is in personal finance; it poses some serious shortcomings and doesn’t account for the value of a human connection.

The Irreplaceable Role of Human Expertise

Have you been on a call where you had a specific question, but you were routed to an automated voice saying something like, “In a few words tell me why you’re calling.” You attempt to explain but the computer doesn’t understand what you’re trying to accomplish. You then spend several frustrating minutes trying to connect with a human by pounding 0# over and over. Then once you’re connected to a representative, you’re on the verge of a technology meltdown. And all of this could have been avoided had you had the option to connect with a live person on the other line, or is that just me? I may have said too much.

When requests and questions are basic then an AI tool can speed up getting the right answer. However, when the prompts are technical and nuanced, like personal financial situations, then AI falls short.

Four Points Wealth aims to incorporate AI-powered tools where we can expedite the creation of financial models, generate potential outcomes with complex inputs, and access a wealth of supporting information. This enables us to provide more comprehensive, data-driven recommendations. In the end, it is my job as a financial advisor to empower my clients to make well-informed decisions with confidence and that is something that data alone cannot do.

While AI holds tremendous potential, it’s important to recognize that it cannot replace the expertise and experience of a human. It is a great tool for computational tasks, but when it comes to making complex decisions that impact long-term financial well-being, the human touch is indispensable.

Moreover, apart from interpreting complex market dynamics and considering external factors, a key part of our job as financial advisors is to assess the emotional and psychological aspects that influence financial decisions. This is one of the main reasons why an advisor’s knowledge, intuition, judgement, and ability to interpret the nuances of each client’s unique situation cannot be replicated by AI alone.

Limitations of AI in Financial Advice

Most AI tools are still in a trial-and-error period, and some are still not able to access up-to-the-minute data. ChatGPT, for example, launched in November of 2022 and has been used widely by over 100 million users. However, up until May 2023 when the chatbot was updated to connect with Bing’s search engine, ChatGPT was relying on and popping results based on data from 2021 and older. Considering that financial markets undergo day-to-day changes influenced by a myriad of factors, it proves challenging for AI algorithms to adapt swiftly and effectively to this specific market.

Moreover, while AI can process vast amounts of data, it struggles with deep data analysis and the ability to make logical decisions that go beyond patterns and correlations. To illustrate this point, let’s consider a real-life scenario:

A client approached me with a dilemma: he needed to pay over a half million dollars in alimony to his ex-wife over a 10-year period. He felt had the income required to simply pay the amount, but I knew we could find options that better suit his needs and overall financial goals, so I suggested an alternative approach. Our financial models showed that by putting the money into a very conservative investment he could generate modest returns – roughly 5% annually. At the end of the 10-year period, he would have over $200,000 remaining. My client would pay his ex-wife her full alimony but in a more efficient way. Through this process we were able to show the client that he could effectively pay his ex-wife just over $300,000, saving him nearly $250,000. This decision required a deep understanding of the client’s financial goals, risk tolerance, and strategic thinking—knowledge-based factors that AI-driven software cannot fully comprehend or replicate.

The Ideal Combination for Financial Success

Wealth management is about more than just cash flow and market data —it’s about understanding clients on a personal level. Financial advisors possess the ability to empathize, taking emotions, dreams, and goals into account when working with clients. We can provide a listening ear, a guiding hand, and customized solutions that align with each person’s unique circumstances. More than crunching numbers, we can help clients navigate complex financial decisions while ensuring their aspirations and long-term objectives are at the forefront.

In the ideal world, we can build a sort of collaboration process between AI and human advisors where each complements the other’s strength. The software or chatbot empowers advisors by providing them with data-driven insights, sophisticated modeling capabilities, and enhanced risk assessment tools. This allows advisors to focus on higher-level strategic thinking, personalized client interactions, and the ability to interpret and communicate complex financial concepts effectively. Human advisors, in turn, play a pivotal role in validating AI-generated recommendations, incorporating ethical considerations, adapting strategies to individual client needs, and providing the human touch that builds trust and rapport with clients.

So ultimately, in the pursuit of financial success, the ideal formula lies in combining:

Personal Connection
Data and Information
Technology (including AI)
Trust and Accountability

AI holds tremendous potential to revolutionize the financial advisory landscape by leveraging its advanced algorithms and data analysis capabilities. But when combined with the invaluable expertise, intuition, and empathy of human financial advisors, this synergy has the power to truly nurture long-term financial success for individuals and businesses alike.

As financial advisors, it becomes our paramount responsibility to ensure that our clients benefit from the best of both worlds—a comprehensive and data-driven approach enriched by a profound comprehension of their unique goals, dreams, and aspirations.

The Four Points Wealth Approach

My team and I at Four Points Wealth know your name, your family, your business, and everything else that matters to you. We provide a higher level of personalized service because you get to build a relationship with us while we guide you and act as a resource for you over time. We become knowledgeable about your unique needs and goals and can provide more tailored advice specific to your financial ambitions.

We also have the same access to data, technology, organizational processes, and research tools as the largest wealth management firms. However, as a CERTIFIED FINANCIAL PLANNER®, I’m responsible for recommending what is in your best interest rather than pushing specific financial products. This means that regardless of what any AI-driven financial software or other tool may tell us (or you), you can trust that I will advise only what is in your absolute best advantage.

If you have questions, please feel free to reach out. I am always happy to be an informal sounding board as you pave your way to financial vitality.


Advisory services are offered through CS Planning, Corp., an SEC registered investment adviser.

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