AI vs. The Human Financial Planner:

0:00 In a world of artificial intelligence, are financial advisors becoming obsolete? Let's talk about the pros and cons of AI with your financial planning. Welcome to Something More with Chris Boyd. Chris Boyd is a certified financial planner, practitioner, and senior vice president and financial advisor at Wealth Enhancement Group, one of the nation's largest registered investment advisors. We call it Something More because we'd like to talk not only about those important dollar and cents issues, but also the quality of life issues that make the money matters matter. Here he is, your fulfillment facilitator, your partner in prosperity, advising clients on Cape Cod and across the country. Here's your host, Jay Christopher Boyd.

0:41 Welcome again to Something More with Chris Boyd. Thanks for being with us. I'm Chris Boyd. I'm here with Jeff Perry and Russ Ball. We are all of the AMR team and glad to have you with us. Another episode, this time we're talking about artificial intelligence. Some of the pros and cons, things to be thinking about. I came across an interesting article and thought this was one of the things people are thinking about. It's the time of year where we talk a lot about financial planning, so thought it might be a topic worth revisiting. When you think about a financial plan, doing financial planning, by the way, I hear your chair creaking every time.

1:23 It's chronic. I should ask AI how to fix my squeaky chair because I used all the knowledge that I know to make it less squeaky and it's back again. Just wanted to start with this notion of when you think about a financial plan, there are some things that you can get out of a AI program, probably some good basic details that could be helpful, some lessons, some tips. Russ, you're thinking you got something to add? Of course. We've all been playing around with AI over the last couple of years. When it comes to financial planning, it's typically your one question of input and then you get an answer.

2:09 It doesn't really look at everything. I know there are new apps and new companies coming out with different products that can take a look at all the accounts that you might have if you have a few checking accounts and all that and put it all together. It's difficult with the hallucinations that AI goes through. We're going to talk about this a little bit more, but I've found that there are times when it's extremely useful and there are times when if you don't know the next question to ask, for example, it's kind of useless or it'll just give you an isolated answer that doesn't really take anything else into account. I know we're going to talk about AI versus financial planner, but the thing that when you were introing, Chris, I went right to is physicians.

2:57 People have been googling symptoms for years, but this just must put that whole thing on doctors, lawyers, financial planners, other professionals. It just magnifies what people think that they might know. I know every time I make a diagnosis with using the internet, I'm wrong. I had someone come in the other day and they were saying how they use some programs. These may not have been AI necessarily, but they were trying to get their hands around a financial plan and they started using some general programs.

3:37 They found that everything was peaches and cream and rosy and nothing to worry about. When we did the actual financial plan, we took into account things that they might not have considered perhaps. We asked them some questions about expenses in a way that might be a little bit more engaged, a little more of a deeper dive. That's right to Russ's point. What's the next question that you're supposed to ask? AI answers the question you've asked, but doesn't know the next or doesn't pose the next question to ask. Yes. I think the more you want to tailor your planning, the more you might need some involvement on the human level.

4:31 I think we find that there's a whole element of a conversation we have, Russ, when we're talking about a financial plan, that it involves family dynamics. It involves aspirations, fears, anxieties, priorities. Some of this that's maybe on an emotional level to some extent, but that's not the kind of thing you're going to put into your query with a co-pilot or chat GPT or whatever.

5:20 Right. It'll take the input and it'll give you an output. Usually, it's based on some kind of math. If it's, will this money get me this far or whatever? Right. A lot of the time, it's not the most optimal mathematical decision that ends up being the one that people choose. That's a great point. The most common question we get asked, it's among the most common questions. Right. Did I pay off my mortgage? There's a math question involved. I'm getting 6% interest rate on my investments, but my mortgage is under three or whatever it really is, but some number.

6:06 Should I pay off my mortgage? Well, the arithmetic of that is, why would you? Now, there's risk in my portfolio. If my cash is getting me greater than three, then it's a no-brainer. You're keeping that mortgage. Right. But you could ask the same person who has a, not the same person, but another person who has a paid off mortgage and say, hey, you can get a mortgage for 4% and invest it and get six. Do you want to take a mortgage out on your house? That's a great point. I know people would generally be like, no. But I think what we often talk about with people is, the math is one way to answer the question, the arithmetic.