The Benefits & Drawbacks of AI for Savers and Investors

It’s here.  The question is what to do with it.   Like most things, there are upsides and downsides to AI, and then there’s a middle ground.   

On the upside, as it relates to your financial well-being, is that it allows you to participate in the process of building and maintaining wealth from a more informed perspective. An investor could, for instance, gain an understanding of the Secure Act 2.0 because they can be presented with a summary versus the safari-like, and often fruitless, exercise that confronts them through traditional search.  And that means they can have a more meaningful dialog with their advisor about the impact of the Secure Act 2.0 on their particular financial situation.   

In addition, investors can gain more transparency about the products their financial advisor recommends.  But there are other things savers or investors can learn.  For instance, what are considered to be “best practices” in an advisor/client relationship?  In this case, AI is surfacing important issues that can strengthen the advisor/client relationship.   

The downside to AI is that it’s not subjective.  It’s objective.  It can tell you the steps that should or can be taken to finance a college education.  But it can’t tell you what you should do to finance your child’s college education. 

That’s because your child may have specific ideas about the type of schools they want to study, or they have an ill-advised, though nonetheless inevitable gap year in mind.  And AI doesn’t know if you have untapped equity in a second home or if you are tapped out.   

The other downside to AI is that it’s not always right.  In fact, it can be categorically wrong.  Further, for all of AI’s intelligence, it’s surprising how much it doesn’t know. It doesn’t know when you are turning 65, how many children you have, inheritances you are expected to receive or your credit card balances.  It knows everything, and yet it knows nothing.   

But this downside is really an upside because it focuses client/advisor attention on you, the client, and what your very specific needs are.  So net, net, our take on AI at this moment is that our clients should use it abundantly.  Use AI to learn more.  Then call us right away.