Andile Jonas, Head of Marketing at Momentum Savings, loves artificial intelligence. But he’s not trading in his financial adviser yet.
My colleagues are often amused at how handy I find artificial intelligence (AI). I will shamelessly use it to summarise a report, create an infographic and even to down tone a bit of criticism I must share.
AI is changing the world and saving us time. But a lot of people are quick to warn of its shortcomings, such as less creative solutions, not contextualizing challenges and falling short when it comes to leadership negotiation. These handy assistants may be brilliant at gathering information, but they can’t think yet. They are not called large language models for nothing – they gather streams of words they think may answer a question you pose.
Unfortunately, some people are starting to use it as a shortcut for financial advice. They ask a couple of questions, and based on the answers, they consider risk aversion, savings amounts, savings horizons and even savings products and underlying funds.
This makes me nervous.
While I am all for new technology, what it can do for us and the time it can save us, I’m not ready for AI financial advice. Because it could mean one size fits all. Maybe that’s a sound principle for socks and bulky sweaters, but my money?
The challenge is that each of us is unique and has unique needs. Does your family look like mine? And even if they do, surely our dreams and what we want for ourselves are not the same?
But say Mr. Robot can figure out a couple of things about me, what if my circumstances change overnight? Will I be protected against the unexpected? How well does it know the market and what is available and suitable for me and my psychological makeup? Will it know which combinations of products give you cost discounts and which reward your loyalty? Will it know that up until a certain time of the year, you can sometimes buy time back to more expensive medical aid if disaster strikes?
On the media platform Substack I came across the following pearl of wisdom. Writer Andrew Curry from “Just Two Things” refers to the designer and futurist John Willshire, who has been exploring the term “cognitive debt”. This is how Willshire defines it: “[It] is where you forgo the thinking in order just to get the answers, but have no real idea of why the answers are what they are.”
He warns the outcome could be “a strategy without the sensemaking”. Now that is scary.
For my money, I want a plan, and one that makes sense.
Let me summarise the main things that make me happy about my financial adviser:
- He can not only analyse my needs, but also prioritise them.
- He knows how much risk I can handle without getting panicky.
- He can help me avoid money mistakes.
- He points out when I want to make emotional decisions.
- He keeps track of my progress and is a voice of reason when I’m off kilter.
The best thing is that I can make adjustments as my needs change, because they do. I know my adviser costs money – but it may be more costly not to get professional advice. Do you trust Dr. Google to be your heart specialist? Neither do I.