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So, about me: I am a financial planner and I have been doing this for decades now. In that time, I have seen AI launch with a flurry into our worlds and I have wondered -can it do what I do?
In my years as a planner, I have refined my methods of encouraging my planning clients to really think about their future, and part of this is questioning, and listening. And I do ask a lot of questions, as this is very, very important. I think humans do this pretty well.
Through this process of questioning and listening (often with compassion and empathy) can I get to the crux of what my clients truly want and need, and where they are at today. Only when I get the real nitty gritty of this information can I create a plan that is going to bring real value into their lives.
Once the plan is in place, the next part of my job is the ongoing support needed as the years go by and things change. Because things always change, and we need to adapt as we go along to make sure the goal is still reached in the end.
Could I robot do this too?
As I started to write this blog for the Spin, I thought I’d check out what AI might have to say about the most important financial planning questions.
So, I asked ChatGPT – What are ten financial planning questions for the future?
The list of 10 was good, and in my opinion a good seed to sow in the minds of those wanting to take control of their financial future.
These were the answers from our robot friend:
1. What are your long-term financial goals and aspirations?
2. When do you plan to retire, and what kind of lifestyle do you envision during retirement?
3. What major life events do you anticipate in the future (e.g., buying a home, funding education, starting a business)?
4. Do you have any specific legacy or estate planning goals?
5. How do you prioritize your financial goals, and are there any trade-offs you are willing to make?
6. How comfortable are you with investment risk, and what is your capacity to tolerate potential losses?
7. What is your current savings rate, and how much are you able to save or invest towards your future goals?
8. Are you adequately protected with insurance coverage, such as life, health, disability, or long-term care insurance?
9. Do you have any existing debt or financial obligations that need to be considered in your future planning?
10. What is your current tax situation, and how can tax planning strategies be utilized to optimize your future financial outcomes?
These are solid questions and typically what you should expect to be asked.
Am I worried this AI will replace me? No.
Are the questions above enough to get you to your goals? No.
So, what’s missing here:
What is missing is a thorough analysis of where you are today, what do you own, what do owe and where does the money go. Having a stake in the ground is critical, your current net worth position listing all the things you own, cash in the bank, investments and what debt do you have. We can’t track your progress unless we know where we are starting from. Critical to reaching our financial goals or objectives is knowing where the surplus is, and where that may be expanded or squeezed in the future. This takes analysis, questioning, listening and honesty.
I would argue that many people are not motivated or prepared to change anything if we haven’t created a reason. In my mind that is where a good adviser or planner comes in. They are interested in you, the individual, and will tailor the advice to your plan and what you are trying to achieve. Financial planning often involves a change in behaviour, whether it is a sports, health, or personal goal something needs to change to attain that goal. Understanding human behaviour and motivators is also valuable when it comes to helping people change a behaviour – e.g., if the financial goal can’t be met, how can we encourage that person to change a behaviour to do so? A robot won’t work so well here.
All successful teams, athletes and people get professional advice whether in the form of a coach, manager, adviser, or mentor. They recognise the importance of being held accountable, measuring their progress, and pushing their limits without putting everything or themselves at risk. This is where dreams come in, the dream may seem impossible or unattainable, but if we can make it a goal then that is where the magic is. Once it is expressed out loud and shared with someone else and committed to paper it becomes a goal something we can focus to and act on. Working with a planner is like having your own financial coach. As professionals, their actions are accountable too. Being a part of the FMA, you know you have a certified person working by your side and you can expect a guaranteed quality of work and results that an AI model can’t match.
A lot of people just want time. Time is the most valuable thing we possess, yet we often give it away for free, or waste it. Once time has gone, it is gone forever. We can’t get time back, and we can’t leverage or borrow time. Goals may not be purely financial, they can be deeper – physical, mental, spiritual. A deeper understanding of what people value and want is a key to successful financial planning. It’s not always just about the numbers! AI might be able to spit out the numbers, but it won’t be able to know when to take a hit in one area so that some of your other important goals can be met too.
It is easy to live our young lives and assume it will all turn out ok when we retire. That’s the Kiwi mentality of “She’ll be right.” But without a plan in place, or even an idea of what you want, or where you are today, how can you be sure that she will in fact, be right?
Financial planning is like planning a long vacation. The vacation starts sometimes around our retirement and can last another 30+ years. Without a plan in place, we know the destination, but not how to get there, and once there, what we can do. When we plan, we know not only the destination, but how long we can go for, how we will get there, what will we do today, and how much do we need to save to enjoy it.
I decided to ask ChatGPT if it would be able to plan my retirement for me. This was its response:
“I can provide information and insights to help you make informed decisions about your future plans, but I cannot plan your future for you. It is ultimately up to you to make the choices and take the actions that will shape your future. However, I can assist you with tasks such as financial analysis, goal setting, and exploring potential career paths or educational opportunities. To create a retirement plan tailored to your specific needs and goals, it's recommended that you consult with a professional financial planner who can take into account your unique circumstances and preferences. A financial planner can work with you to develop a comprehensive retirement plan that factor in your income, expenses, savings, investments, and other important considerations. They can also help you to stay on track and adjust your plan as your circumstances change over time."
ChatGPT recommends the right questions.
The bigger question is, can you do it on your own? If not, give us a call.
Dean.
About Dean: Hi everyone! My name is Dean, and I am Financial Adviser and coach. I work with people to help them to achieve their financial goals and assist them to make smarter financial decisions. Drop me a line for a chat and to work through your goals. I work with you to become financially fit and together we create a game plan for your financial future. D.
Disclaimer: Dean Blair (FSP87402) is a Financial Adviser with Velocity Financial (FSP95466). No investment decision should be taken based on the information in this blog alone. Please see Dean’s disclosure statement on our website.