This technology isn ’ t really new . The first responsive chatbot was created over 50 years ago by MIT researchers . It ’ s been roughly a decade since the first chatbot passed mathematician and computer scientist Alan Turing ’ s test of how convincingly “ human ” interactive technology is : That bot convinced more than 30 % of its users that they were not speaking with a program , but a real live person .
“ Today there are many more that feel truly human to the user , with all the pros and cons that entails ,” says Philipp Hecker , CEO and co-founder of Bento Engine , an advice engagement platform for financial advisors . “ The pace of change and progress is amazing in terms of the underlying technology .”
Hecker says the only things that really hold AI applications back from sweeping across the wealth management space are humans ’ willingness to engage with the technology and the regulatory framework that advisors operate within .
Are We Ready ?
More recently , technology companies have experimented with using generative AI on social networks like Twitter ( now X ). In one infamous case , Microsoft deployed a chatbot , Tay , on Twitter in 2016 . Twitter users quickly trained Tay to make outrageous , nonsensical and inflammatory statements , leading Microsoft to shut it down .
After ChatGPT ’ s upgrade brought generative AI to a broader audience this year , stories proliferated about students and technical writers who tried to use the bot to produce deeply cited academic research , only to find that the software was convincingly fabricating the sources it was citing and that , in the end , it had produced useless copy .
Even more recently , Microsoft incorporated ChatGPT into its Bing search engine so users could ask the software to generate statements and pictures . The company found out that despite the guardrails it had put in , users were able to “ teach ” the AI to make outrageous , racist and defamatory statements and images . One infamous image the bot produced showed Mickey Mouse brandishing a handgun as he pilots an airplane into the Twin Towers of New York ’ s World Trade Center . The incidents led Microsoft to “ lobotomize ” Bing ’ s AI , putting up even newer guardrails to prevent misuse .
Today , the world is contending with AI ’ s ability to create “ deepfakes ,” believable video and audio replicas of people ’ s faces , bodies and voices generated entirely by computer .
Given AI ’ s tendency to make mistakes , wealth managers using it could end up violating compliance rules when working with clients , according to Lincoln Ross , CEO of CircleBlack , a cloudbased software platform for advisors . Eventually , he says , the technology might help advisors ’ support teams by collecting data , but he says it ’ s not ready .
The concern isn ’ t just that the financial industry may misapply artificial intelligence , but that the industry itself — as well as the capital markets — could be manipulated by it .
Not Really
“ I would say that , for better or for worse , wealth management has been more conservative when it comes to technology , and that we need to continue to be a bit more conservative ,” says Molly Weiss , chief product officer at Envestnet . “ At the end of the day , trust is an essential part of delivering financial advice , and I think that as an industry you can argue that we haven ’ t been as careful as we should be .”
For that reason , she says financial advisors are likely to use AI right now mainly to make their operations more efficient , rather than using it in any way that “ touches ” an actual investor . “ Trust in the relationship and trust in financial advice is too precious to risk ,” she says .
Many technologists were surprised about any level of interest in AI from wealth managers , who are often hesitant to adopt new technology , largely because of regulators . With federal and state watchdogs looking over their shoulders , advisors may take a long time to embrace newer artificial intelligence for building client-facing tools . While “ weak ” forms of AI , like robo-advisor algorithms ,
The concern isn ’ t just that the financial industry may misapply artificial intelligence , but that the industry itself — as well as the capital markets — could be manipulated by it .
will continue to be used in client-facing environments , Hecker says the industry is only in the “ second or third inning ” of finding ways to use generative AI in a way that complies with regulations .
Where It Can Work Now
Still , that doesn ’ t mean wealth management has to sit on the sidelines while other consumer-facing industries benefit from artificial intelligence . There are already wealth technology firms finding ways to help advisors implement technology behind the scenes .
“ AI is best used as a way to augment non-client facing aspects of wealth management ,” says Ritik Malhotra , CEO at Savvy Wealth , an RIA firm with a digital platform . “ Two quick examples would be helping the advisor brainstorm how to take further actions and helping to automate some of the functions of the back office . Still , none of these applications yet include executing something entirely autonomously .”
Intention . ly ’ s Advisor Brand Builder platform uses AI to help build out an advisor ’ s branded marketing materials , including social media , logos , business cards and web pages .
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