An adviser has gained a client after ChatGPT told them their portfolio “lacked any real conviction” and that they should look for a fixed-fee financial planner.
According to Ian Else, founder of 4 Financial Planning, it came down to the perceived value the client felt they were getting.
Else said the client was paying 1.21 per cent a year all-in for platform costs, investment management, fund charges and ongoing advice on a portfolio worth less than £500,000 — which Else said he did not think was “hugely expensive”.
However, Else said the client told him he had uploaded his statement and portfolio to ChatGPT and explained the service he was receiving.
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According to Else, the client said: “ChatGPT said I should look for a fixed fee financial planner who offers cash flow modelling as well as portfolio management.
“It said my portfolio of more than 30 funds lacked any real conviction and that I would probably be better served by a low-cost portfolio of index funds.”
Speaking to FT Adviser, Else said it was naive to think that over the next decade “AI is not going to really educate people about what is reasonable and fair and value”.
“I think there is still a whole world of financial advisers out there that are charging 1 per cent across the board and not giving too much for it,” he added.
According to Else, it is going to be far easier for advisers who “have been hiding a little bit” to be “found out over the next decade”.
Indeed, the client said: “My adviser comes to see me once a year, goes through pages and pages of graphs, and leaves.”
I think there is still a whole world of financial advisers out there that are charging 1 per cent across the board and not giving too much for it.
Else, who operates on a fixed-fee basis, acknowledged that he was “heavily biased and skewed” towards that model.
Initially, Else questioned whether the client needed a financial adviser at all.
However, the client said he did not want to ‘mess it up’, leading Else to agree that part of his role was providing reassurance.
Else said: “An adviser like me who is relatively low cost in the big scheme of things, what I am going to charge him on a monthly basis represents value for money almost for that behavioural piece alone.”
Comments on the LinkedIn post where Else detailed his experience focused on the increasing need for advisers to demonstrate and articulate value.
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One adviser from the US commented: “All I get from this post is that ChatGPT is gonna (sic) sort the real advisers from those who have survived because they talk about charts for an hour.”
Another commenter said: “It is fair to say that AI is inspiring people to get more input and scrutiny of their plans and supporting advice.”
“Places to hide (are) getting scarcer by the day it seems,” one comment concluded.
Else, however, said he welcomed his clients going to ChatGPT and asking them about his service because he felt ChatGPT was going to back up what he did.
“It isn’t rocket science, particularly: sensible income plans, good savings, withdrawal, robust strategies, all of that sort of thing,” he said.
hereward.mills@ft.com