AI continues to progress and expand rapidly. It made me contemplate the possibility of my job being replaced. I believe many of you may have had similar thoughts.
During the weekend, news emerged regarding JPMorgan Chase’s application for a trademark called IndexGPT. This particular technology utilizes artificial intelligence in cloud computing software to analyze and choose securities based on individual customer requirements. In essence, IndexGPT appears to function as an AI-based financial advisor, offering personalized investment recommendations.
If IndexGPT gains traction and performs effectively, it could potentially lead to the replacement of human advisors. Clients would be able to provide their information to IndexGPT and receive a recommended set of securities to invest in.
For instance, a client might input a prompt such as, “I am looking to retire in 20 years and aim to accumulate $2 million with my current capital of $500,000. I prefer investing in companies that are ESG compliant. Please suggest an investment portfolio that aligns with these criteria.”
As IndexGPT is not yet available, I consulted ChatGPT to provide a glimpse of what advice from such an AI financial advisor might resemble:
By providing additional prompts, it is possible to generate more specific and actionable ideas.
As someone who is not a financial advisor, I don’t have concerns about being replaced. However, as a financial content creator, the emergence of IndexGPT could potentially render this Finbite Insights publication unnecessary.
Imagine if you wanted investment ideas, and with IndexGPT, you could simply obtain them directly without the need to read articles or watch YouTube videos. Wouldn’t that be quicker?
For instance, if you’re interested in investing in the AI sector, a simple prompt could provide you with relevant investment ideas in a matter of seconds:
Consequently, there may come a time when financial content creators become obsolete.
However, the demise of financial advisors and content creators has not been sealed just yet.
To begin with, there are already AI-powered ETFs available in the market, but their performance has not surpassed that of traditional index ETFs such as the S&P 500 ETF. Here is a comparison of their year-to-date performances:
Consequently, there is still a general lack of a complete trust in AI among humans. It is acknowledged that ChatGPT, like any other AI system, is susceptible to making mistakes, underscoring the importance of fact-checking when utilizing AI. This implies that there is a possibility of AI making incorrect decisions and recommendations.
While the ongoing improvement of AI is expected, human verification remains imperative until AI reaches a higher level of reliability.
Furthermore, financial advisory heavily relies on human interaction and connection. It involves building a rapport and trust with clients. Financial advisors possess the ability to empathize with clients in a way that AI cannot. They understand their clients’ aspirations and goals, allowing them to create personalized plans that facilitate their achievement. Advisors serve as cheerleaders during successes and provide the necessary support during challenging times. This is a crucial aspect that AI should never be allowed to perform, as it should never attain sentience.
Instead of perceiving AI as a threat, financial advisors can utilize AI for its logical capabilities and vast database to expedite portfolio recommendations and generate investment ideas. However, it remains the advisors’ responsibility to engage in conversations with clients, persuading them to adhere to the plan and stay committed during both market fluctuations and personal circumstances.
Regarding financial content creators, perhaps we should consider transforming our platforms into columns akin to “Aunt Agony.” By providing a space for investors to share their concerns, worries, and fears, we can address them directly. We got to do what the machines can’t, right?
Even if I were to concentrate solely on my investments, there remains the possibility that the markets have been entirely taken over by robots, leaving no opportunity for humans to capitalize on alpha. The markets would truly be efficient.
It is a scary thought. Even though I don’t think a complete replacement of humans can happen even in the finance sector, the probability isn’t zero. If it were to eliminate a significant portion of jobs, the consequences for humanity, in terms of finding purpose and contributing meaningfully, could be already disastrous.
What do you think? Would AI take away finance jobs in the future?
