What’s Your Financial Advisor Doing With AI?

It seems like professionals in every industry are looking into ways that new AI technology can help improve their businesses. While AI hasn’t turned against humankind yet (as far as we know), it’s still too early to trust it with managing your investments and financial portfolio. But that doesn’t mean your financial advisor can’t use ChatGPT and other AI tools to your benefit.

In this episode of Capital Conversations, CERTIFIED FINANCIAL PLANNER™ professional Colin Day and Accredited Investment Fiduciary (AIF®) John Biedenstein discuss how financial advisors have started using AI to make their offices more productive, which in turn allows them to better serve their clients.

For recent investment news and our take on the current market, retirement planning, and investment, listen to our podcast Capital Conversations or view our recent blog posts.

Below is a transcript of our most recent podcast, “Active Vs. Passive Investing: Which One's Right For Me?”



Colin Day: Welcome back to another Capital Conversation. I'm Colin Day, CERTIFIED FINANCIAL PLANNER® professional, and with me today, John Biedenstein. John, how we doing today?

John Biedenstein: We are doing wonderful.

Colin Day: We are. We had lunch today.

John Biedenstein: We had lunch to celebrate a birthday for Marquita. It was very tasty. A great celebration though.

Colin Day: Yes, and it's important that we do this immediately after having our sandwiches because, as I told you, we're at risk of me falling asleep this afternoon.

So we wanted to get this out and make sure that we communicated via podcast or via video, depending on how you're indulging us today. And today, John, topic du jour, “What is your financial advisor doing with AI?”

Do you know?

John Biedenstein: That's a great question for individuals like myself who, candidly, don't use AI or some of these tools for things. I think a lot of individuals, a lot of younger people might use them for, “Hey, I need to replace this. I'm going to watch this to figure out how to do that.” I'm not one that does that.

I do know that we use some of these applications. I think what we're doing is the first step. And I know Colin, you're using some of these things. Sophia is using these things for our suite of services that we're providing people. But how are they impacting things? Some of them might not have a direct end point impact on managing money for individuals, but it does impact how we get a message across to you, or it might impact how we're gathering information to manage assets for you.

That last one is an evolving subject, because I think investment managers are getting a better handle on how AI is impacting companies and productivity and those types of things. And that's where we'll see it further and further down the line.

Colin Day: Yeah. And I think most financial advisors are probably not too dissimilar from the shoes that we're wearing today, which is, we're dipping our toes into the water of AI to better understand how it can help improve our productivity, to be honest with you. Because no, we don't use it for our client portfolio management. No, we don't use it to scan our database and find interesting things that maybe we want to talk about with folks. At least not yet. But for the reasons of privacy, for compliance concerns and things like that, we are taking it very, very slow in terms of the types of technologies that we use, because we want to be sensitive to the fact that not everybody has a comfort level using AI.

I learn stuff about AI all the time. We hosted an event last week where we had a speaker talk about AI to a group of business leaders in the St. Louis area to help them better understand what are the most basic capabilities of AI that you might be comfortable offering today. And I got a lot out of it. I don't know about you.

John Biedenstein: I was thoroughly impressed. Number one, the number of people that showed up to the event and the diversity of the people in their roles. There were HR people, there were accounting people. We work with a lot of construction companies and engineers. So there [were] engineering people, there [were] IT people. So it was a great assortment of individuals trying to get their arms around, what is this and how does this help them? The Microsoft Copilot was the topic du jour there. Like I said, we had a great event, but the other thing, 75% or 80% of the people were there at the end. So it was something where people were interested. There were great questions throughout the thing. So yes, it is something out there.

Colin Day: People are curious and they want to see, “Okay, is this going to replace me?” I think that's first to put it bluntly. I think a lot of people are interested in AI to kind of figure out things like, “What is my job security?” Knowing that these technologies are only going to improve over time. They're not going to get worse. Companies are going to be more interested in adopting them. And because of that fact, we should be concerned about that as individuals, just as we are as financial advisors. I think a lot of fear mongering in the financial advising community is more on the robo side of things, which at least according to many, isn't going to replace the human touch that an advisor can offer.

But I don't think that means that financial advisors need to flee away from offering some kind of AI solutions within either the suite or to help themselves as an office to be productive. So, John, would it be okay if I get you up to speed in terms of all the AI technologies that we use, maybe on a day-to-day basis?

Would that be helpful?

John Biedenstein: Absolutely. And one of them I know already.

Colin Day: You do? Which one is that?

John Biedenstein: Jump.

Colin Day: Jump. So, Jump is a new AI that we're just starting to use in our office right now. And it is a note taking app. You may be familiar with other types. I think it's called Fathom, that basically just exists in the background of your Zoom meeting or your Team's meeting. And basically it's just a note taker. It's existing in the background. And in all honesty, what we use it for is mostly for the transcript. So we can go back to the tape, so to speak, and figure out exactly how we got to a certain realization in the client meeting, that we had a particular touch point or, “Oh man, I really wish I wrote down this number and I just forgot. Oh, well, very good. I've got either the recording of the video I can watch or the transcript.”

But what Jump does specifically for us as financial advisors is it's using a language that helps us better and compliantly – which you'll appreciate as our chief compliance officer – document the relationship that we are establishing with an individual.

So, for example, it's taken the transcript of all the knowledge and all the communication that's been had with the tens of thousands of words that likely I spoke, because I can't stop talking during my meetings. But what it does is it's going to distill it in the way to bring out the most important factors.

So it's going to split off into charts. It's going to split off into bullet points in regards to the things that we discussed, the most important pieces. So it might be, “Hey, how much money do you have outside on your 401(k)? I can't see that.” Great. That's going to be a line item. That's going to be a part of your balance sheet when we think about the assets in your portfolio. It might be providing things like the monthly payment on your mortgage. It might provide various different kinds of details in your financial life so that we can better understand it. And it's going to display it in a way that we can just pull the data very quickly from it, as opposed to reading the paragraphs and paragraphs of texts that we can put in there.

And then it also helps us from a productivity standpoint, because it's going to link to our CRM. So then it goes into the person's file. All the information is right there. It cuts out the middleman in terms of having to do this. And then, I think what's most important and the reason that I want to use this in the first place, is because most of our time in the meeting is me taking notes, using and filling up my workbooks.

It allows me to better understand the individual and to see them eye to eye, whether it's in person or via camera, what are you actually feeling when I'm talking about something as opposed to me just clacking the pen and jotting down things and I'm not making eye contact any longer. And suddenly I've lost you. I've lost the connection.

So I can focus on the most important person in that meeting, which is our client, and less on the paper and making sure that I've documented all the numbers because I can just go to the tape or again, I can go to the transcript.

John Biedenstein: And that's critical from the individual meetings with individuals or even meetings with committees, where we frequently have with retirement plans. The last idea that Colin mentioned is fantastic. I mean, there's been a burdensome duty of who is transcribing these notes. And we can leverage a lot of that to be done by the computer. We always review those [notes] to make sure they're accurate, putting together minutes or anything like that.

But that individual that was frequently taking notes now has the liberty to more kick in and be part of the conversation, and talk about things [like] “Hey, that brought this to mind, or that to mind” and things we should talk about. It's increasing our productivity in regards to how we're handling situations versus, free to manage things rather than just manage what you're responsible to do for this minute.

Colin Day: Right, exactly. Exactly. Again, that's a very good example of a productivity tool that assists us get out of the more commoditized area, which is note taking, making sure that I'm listening to the person, but rather pushing that to the side so I can really focus on the things that matter the most, which is the consulting, which is the idea generation, the things that our clients actually value from our relationship.

That's [an] example of one of the softwares that we're using right now.

John Biedenstein: OK. What's another one that we use, Colin?

Colin Day: So another one that we're using currently, many of you are familiar with, is just ChatGPT. Now, we don't use the paid version, we don't use anything more sophisticated than 3.5, which is currently available to the general public, as long as you set up an account. And the way that we're using it right now is to just generate ideas. Sometimes, I'll be honest with you, John, sometimes it's a podcast. I'm trying to find some ideas of some things that are going on, and man, I'm just really struggling at the moment, and I can go into ChatGPT and I can create a prompt. If you're not familiar, it's basically, it’s another large language model. And so you're using it to create prompts for providing ideas for the next thing that you want to know about, that maybe you don't know the questions to ask yet.

So as an example, I might say, “Hey, pretend you are a financial advisor that does a local podcast for people that might be interested in financial planning topics. This should cover this and this and this. What are eight topics that might be interesting to talk about in this one?

And there might be one that's good out of those eight, because maybe we've covered the other ones. Maybe they aren't things I'm not really interested in chatting about.

The other ways that we use ChatGPT are on presentations. I do a lot of presenting to our 401(k) plans and those participants. And sometimes I hit a wall and I say, “I think I know what I want to talk about, but what are some of the things that maybe I'm not thinking about that our participants would want to hear about?”

So for example, I'm drafting a presentation right now, and after this meeting, I'm going to go work on it. But before I start to really work on it, I'm going to go to ChatGPT and say, “Here are the things that I've got on here. I'm trying to create maybe 20 slides for this presentation on this particular topic.” It could be debt planning. It could be saving for a house. It could be investment management, whatever it is. I can give it the prompt and the kinds of things that I want in there, the creativity, the amount of words that I want per slide. And it will generate the prompt, and then I can copy/paste.

Now, the Copilot program that you were just explaining within Microsoft 365, well, it could just do all that for you. It would just create the presentation of PowerPoint if you wanted it. But the way that we work with it right now is, we would just use ChatGPT for the knowledge.

So does that help? Does that help explain kind of what we use it for?

John Biedenstein: Yes. And I’ll tell you, Colin does a great job on the education on our 401(k) plans. Even with wealth management clients to get more one-on-one. But 401(k) plans, it's more group environments. But there's a lot of folks that we've talked to whether it's a prospect that became a client, that basically said our advisor comes in and talks about the 401(k) plan. They talk about the investment choices, the returns, how much I should deposit, those types of things. But it's the same topics and the same agenda each time. And the fact that we do dedicated sessions on, for example, debt management, high inflation that we've been through, market volatility, when things are going up and down, that's where we differentiate ourselves and we're really focused on participant education so that people might learn something from this and they have an an opportunity to talk with us one on one after it or get a meeting scheduled with their significant other, whoever it is, [that] might be helping them in running their financials or financial planning side. We help in regards to that too.

So, it really takes it past just providing information to an educational experience. And I think that's where keeping up to date and keeping it, “What are you thinking about, what should I be thinking about?” is critical. And I think it's often why our session – a lot of the ones are led by you – the employment education sessions [are] very effective and to the point.

Colin Day: Yeah. And to maybe iterate on the 401(k) side for a second, one of the things that we do every summer is a participant survey. In our 401(k) plans, we handle several thousand participants across the United States.

John Biedenstein: Almost 3,000.

Colin Day: Yeah. Okay. There you go. So we need to keep our finger on the pulse of what all those folks think of. Because they're all different life stages. They're all different kinds of different demographics. We need to make sure that we are speaking to them when we do these presentations because Colin can just sit on top of his mountain and pretend like, “I think this is interesting.” (And, fingers crossed that you do when you watch it.) But if I can figure out exactly what you need, then that's what I want to deliver upon.

So for example, you know, we're going to get hundreds of responses from the survey once we put it out later on this summer. We can use a function within ChatGPT,it could be Microsoft Copilot if it's an Excel sheet and we can take that data and just ask the AI, “Provide me some insight here.” And we can be just as simple as that. And it will spit out information to say, “Hey, most of the the people that are interested in debt management presentations are in their 30s and 40s and they happen to work for ABC company.” I'd be like, “Whoa, okay, well that's really important information for me to know.”

I could probably draw a data set and I can beautiful mind the data in a way to figure this out probably just by spending a few minutes on it. Or I could just create a prompt that does the thing for me, so that when we meet with our plan sponsor representatives and say, “Hey, your participants need to know about this and this is why we know that.” We use a survey and then we use the AI to then generate the information for us.

All this is very valuable stuff within the ChatGPT ecosystem. But I got a third one for you, John.

John Biedenstein: And I already know the name.

Colin Day: Well –

John Biedenstein: Cause you told me.

Colin Day: How many times?

No, I'm just kidding. So the last one, and it's one that many of you are also very familiar with. It's Canva.

So if you're not familiar with Canva, Canva is a design program. It basically makes your stuff that you try to put out on the internet more beautiful than likely I can. I'll speak for myself in this case. John could probably do it without me. But with Canva, what it does is it basically is just taking your information, creating templates, plugging in, and then you can create your LinkedIn post, your Instagram post, your flyer, your document data collection sheet, whatever it might be.

And specifically within Canva, they have offered this AI solution called Magic Design. And Magic Design, you just feed it a prompt. “I need a LinkedIn post. I want it to match my business color scheme.” So it would take all the colors that are ike behind me as an example, and it would create a post based on whatever else I need in the prompt.

So I might say, “Hey, I'm trying to create a post using our business information. And I want it to be this particular quote attributed to this particular person. And I want it to be inspirational.” And it will take that information and it will generate a few ideas for you.

And now this can be hit or miss. Because I've only had success doing this once. But what I will say, where Canva is nice, is that, first of all, this program is very cheap. It comes to like $10 a month, I believe, if you want to have the paid version. But what it does is it helps me organize my thoughts. It helps me with the layout of a page. It better understands the space than I could. What fonts might work well in this particular instance. I'll use it for those particular purposes. Generally speaking, what that spits out will not be what I will use because it's just not good enough or at least not up to my standards. But at minimum, what it's going to do is to organize it.

So then what I do is I create this thing and then I send it over to John cause he's our compliance guy. And then he gets to approve it and he thinks I'm a genius, right?

John Biedenstein: And I do read it.

Colin Day: But those types of things – Again, cause we're not designers here. We don't have a full-time marketing person.

John Biedenstein: Yeah, I like to say that we're cost effective.

Colin Day: Yeah.

John Biedenstein: But candidly, these posts, some of these things come to me and they are very good looking. They're much better than just handwritten, like I would generate it, which is written and then maybe put a color on there.

Colin Day: Yeah. So you put it on the scanner, and then you hand it to me.

John Biedenstein: Right. That's how we do things.

The reality is it looks better. It's often delivering a better message. So it works. And the fact that it's cost effective is great.

Colin Day: Yeah. And two of those three – So jump is one that's specific for or for financial advisors. But ChatGPT and Canva, the latter two are things that are available to the general public.

And I think the whole point of me talking about these three softwares that we're currently comfortable using from an AI perspective is that we're not doing anything crazy here. We're not trying to jeopardize our clients information from a compliance perspective. That's a huge no, no. But what we're doing is we're dipping our toe in the water.

And that's, I believe, how a majority of financial advisors are looking at this. We have in front of us, both John and I, in this JP Morgan report that's talking about the transformative power of generative AI, and they're talking about all these cool things that will happen with AI in the future. And then on the appendix even, they have this chart where they're talking about a task based approach to sizing the productivity impact of AI technologies. And they give some general insights in regards to what we could be doing with AI, and then in order of difficulty, what AI will likely grow into. And we're on the most basic level. And again, I think all financial advisors, if not 99% of them are in our same boat. And what we are focusing on is not on the portfolio side. Not doing weird things with client data – big no-no. But rather just trying to be more productive with you all.

John Biedenstein: Correct.

Colin Day: That's it. I mean that's really all I see it being used for. Jump [by] itself is saving me hours of time doing transcript work, re-reading the notes, having to produce the notes, having to produce the emails and the recaps and things like that. It's all in the system. So that saves me a ton of time when I use it. But I'm not using AI to, again, do weird things, find the person on the street, take a photo of them, look them up online and see where they work, who's their kid or is their kid in my elementary school, my kid's elementary school class, like that kind of stuff.

We're not doing any of that. Huge timeout and huge no-no. So, I think that’s the level that we as advisors are comfortable using AI at this point.

John Biedenstein: Yeah. And as Colin mentioned earlier,robo advisors are robo AI advisors, I think we both agree that it's simply a roll of the dice. That's gambling. That's not investing. That's not what we do. We don't ever see that AI would have an impact on the investments that we're selecting or monitoring and managing for you. We might be looking at things that companies do, or investments, whether it's stocks or equities or managers, how they are using AI, but we're not making a decision on them based on AI, if that makes. And I think that's very important because that's not what the client is hiring us for. So we're using this technology to benefit them.

Colin Day: Yeah. I would say probably the next area where AI could be used in an office like ours would be in analysis. Just better understanding your personal situation. “Here's the data that I have, anonymized information on an individual. What are the opportunities that do exist from a planning perspective?”

I don't even think we're gonna get to that point where we talk about from an investment standpoint for probably at least a few years. But then again, many people got very excited back in 2000 with internet companies, if you remember, John. And we know how that busted in a big old bubble. I don't think AI is in the same place, but I think some of the growth that we've experienced over the past, let's call it a year and a half or so, has been because of the popularity of AI and ChatGPT. You see it in the number of publicly traded companies that mentioned AI when they're giving their quarterly reports, it's something that's not going to go away.

And so we're going to use it to our comfortability level, which again, it's on the productivity side. And we'll just have to approach it as it comes with new opportunities.

John Biedenstein: Agreed.

Colin Day: All right. Well, John, thanks for joining me today. I appreciate it.

John Biedenstein: Thank you all for watching.

Colin Day: Until next time, have a great day.

The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing.

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While AI offers incredible tools to enhance our services, the human touch financial advisors offer in financial planning and financial education remains a great way for families, individuals, and business owners to achieve their goals. If you enjoyed today’s episode, subscribe to our podcast and share it with your network. If you're looking for bespoke financial advice, consider reaching out to Correct Capital Wealth Management. You can give us a call at 877-930-4015, contact us online, or schedule an appointment with a member of our advisor team. It only takes 15 minutes to find out if we’re a good fit.