No, AI Will Not Replace Human-Led Financial Advice

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Advisors can already pick from dozens of tech products that use generative AI to automate aspects of their work. How long will it be until we see an end-to-end generative AI platform that does everything a human advisor can do, just as well as they can - if not better?

Research from MIT Sloan contends that a full-service advisor AI “is closer than you might think.” Andrew Lo, a professor of finance at MIT Sloan and director of the MIT Laboratory for Financial Engineering, explores AI-powered financial advice as a snapshot of the exact kind of complex, high-touch professional service that large language models (LLMs) might replace.

However, I have my doubts, due to the practical realities of meeting those challenges and real-world examples from other industries that have already tried to go down the road of full automation.

Parsing The AI Hype

I’ll be blunt: a lot of generative AI’s potential is still hype. We see promises every day of what LLM tools could do. We’re assured the current state of generative AI is a work in progress, and the next version is just around the corner. But we have to reckon with the technology as it currently exists.

Microsoft was the first out the gate to incorporate generative AI into Bing, its search engine. They hit Google at a time when Google’s search results were (and are still) clogged with terrible results. After a year, Google has not gotten any better. But Bing’s market share barely budged versus its competitors.

If we look at Amazon, another enthusiastic adopter of this technology, Amazon CEO Andy Jassy expects AI will drive “tens of billions” in revenue in the future. But at present, he said generative AI revenue was “still relatively small.”