Last month, you read about how potential future clients could be using large language models (LLMs) like ChatGPT to find your business.
There are two potential outcomes here:
- They don’t find a suitable adviser and decide to continue managing their finances alone.
- They find you or another adviser to help manage their money.
In either case, ChatGPT doesn’t simply disappear. If a client finds you through ChatGPT, they are likely to continue using it regularly – from meal planning to learning about new topics, and, of course, to help with their money.
LLMs offer significant value. But if your clients use them as a catch-all to solve their financial problems, they could be vulnerable to poor decision-making.
ChatGPT is capable of nuance, but it doesn’t know your clients
LLMs like ChatGPT can assist with organisation, time management, and learning. If your client struggles to budget, for instance, ChatGPT could help them create one they actually stick to. But for more complex financial decision-making, LLMs fall short.
To test this theory, we asked ChatGPT: “How much can I put into my pension every year without getting taxed?”
It gave us an accurate overview of the Annual Allowance, tapered Annual Allowance, carry-forward rules, and tax relief on contributions. At the bottom of ChatGPT’s response, there’s an example:
- You earn £50,000.
- You can pay in up to £50,000 a year and get tax relief.
- If you wanted to put in more, say £70,000 a year, you’d need to use the carry-forward allowances from previous years.
On the face of it, the above is correct. But as you will know, it assumes countless factors about the contributor’s financial situation and does not account for the risks or downsides of paying huge lump sums into a pension.
In short, ChatGPT hasn’t provided context, so the consumer can’t make an informed decision.
We tried another question: “What should I invest in to return 6% a year?”
ChatGPT provided a breakdown of the standard options you’d expect: equities, government bonds, real assets, balanced funds, and corporate bonds. It offered short bullet points with the advantages and risks of each type. It also clarified that 6% a year is sometimes achievable but not guaranteed.
This isn’t the full picture though, because ChatGPT has no idea who has asked the question. These “recommendations” don’t take into account the consumer’s risk tolerance, time frame, or life goals.
4 ways to emphasise the value of advice in the age of AI
You may have read the above and thought, “I already know ChatGPT doesn’t measure up to advice. What can I do to stop clients using it to make big life choices?”
Here are four things to do now.
1. Avoid scoffing at the use of ChatGPT and other LLMs
If you don’t use LLMs yourself, you may turn your nose up if a client mentions them.
Although sometimes unintentional, snobbery towards AI could make a client feel judged or shamed for using it. If you’re worried about them falling for misinformation, reframe your disapproval into care and concern. Ask probing questions rather than dismissing LLMs as “nonsense”.
2. Educate yourself on the capabilities and limitations of LLMs
It’s hard to criticise something you don’t know much about. If you want to steer your clients away from using ChatGPT for financial planning, it may be wise to first educate yourself on its capabilities.
Remember:
- When you create an account, LLMs learn about you and tailor their answers to what they “think” you want.
- You can converse with these LLMs, asking follow-up questions to get to the heart of the issue.
- There are data protection concerns under GDPR regarding LLMs, so make sure you are not putting sensitive information into your prompts.
Next month’s newsletter will discuss the dos and don’ts of advisers using LLMs in their own work, so stay tuned to learn more.
3. Emphasise your qualifications and the regulatory scrutiny your business goes through
Finally, it may be helpful to steer the conversation away from what ChatGPT can’t do, and towards what you can do.
Reminding your clients of how qualified you are, the regulatory scrutiny your business goes through, and the tangible impact your long-term advice can have on their life could bring the value of your work back into focus.
Ultimately, they can trust your advice because it is backed by expert research, due diligence, and regulatory frameworks – something AI can’t provide.
4. Stay in touch throughout the year
If you fade into the background of a client’s life, they are more likely to look for alternative “advice” online. And with constant media noise drumming up anxiety in many consumers, annual reviews might not be enough to reassure them.
You can keep in touch by:
- Regularly posting on social media platforms like LinkedIn and Facebook
- Sending a monthly or quarterly newsletter
- Reaching out after major fiscal events like the Budget
- Picking up the phone after a client goes through a serious life event, such as a divorce.
Keeping your services front of mind may prevent clients from using LLMs for quick fix “advice”.
Get in touch
Our network is committed to maintaining adviser independence and helping IFAs and clients thrive in an ever-changing world.
Email hello@corbelpartners.co.uk or call 01925 637891.
Please note
This article is for general information only and does not constitute advice. All information is correct at the time of writing and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.