\u201cThey are trying to personalise their recommendations or their advice. You can talk to your money and ask it to take actions on your behalf.\u201d <\/p>\n
Akahu sits behind many of the apps New Zealanders use to track spending, budgeting and investments, connecting bank data to third-party platforms, so they\u2019re seeing it happen in real time. <\/p>\n
First social media came for my job \u2013 now AI? But not so fast. <\/p>\n
Financial advice in New Zealand is a regulated activity \u2013 you can\u2019t just dish it out at a barbecue. <\/p>\n
Providers must be licensed by the Financial Markets Authority (FMA), advisers must be qualified and on the financial services register. (I can\u2019t even call myself a financial adviser at the moment, given I\u2019m not currently employed by a licensed provider). <\/p>\n
An adviser must act with integrity, provide advice that is fit for purpose and ensure the client understands the advice. <\/p>\n
Can AI really live up to all that? Who is responsible when AI gets it wrong? <\/p>\n
The FMA told me in an email this week that financial advice is \u201cwhen a person makes a recommendation or opinion about a financial advice product\u201d. <\/p>\n
Given that AI is \u2013 famously – not a person, but is increasingly giving recommendations and opinions, is our regulatory system ready for what\u2019s coming, or indeed is already here? <\/p>\n
Interestingly, everyone from regulators to advice firms and industry bodies had many positive things to say about AI in financial advice \u2013 it isn\u2019t just a doomsday \u201ceveryone will lose their jobs\u201d story. It could make financial advice more accessible \u2013 and we need that. <\/p>\n
FMA research on accessibility of advice found only 28% of New Zealanders accessed financial advice in the past year, despite 63% thinking about their finances weekly. <\/p>\n
It\u2019s not hard to imagine people trusting AI to advise them on big financial decisions given many already use it as a counsellor, (or even as a love interest). <\/p>\n
It could also remove the inertia that keeps people stuck in poor financial products simply because changing providers is time-consuming and\/or confusing. <\/p>\n
Financial Advice NZ provides training courses to help firms embed AI into their advice businesses \u2013 because the shift has already started, behind the scenes. <\/p>\n
Lighthouse Financial is utilising AI for admin functions currently and told me financial plans \u2013 which used to take four hours to write \u2013 are now produced much faster. <\/p>\n
But is that just one step away from removing humans from the equation altogether? <\/p>\n
\u201cIf you\u2019re an adviser who just takes orders from clients … you\u2019re in trouble,\u201d head of wealth James Blair says. \u201cMoney is simple; people are complicated. If you\u2019re a financial adviser who aligns people\u2019s lives and goals with their money, you\u2019ll be fine.\u201d <\/p>\n
Financial Advice NZ is singing from the same hymn sheet there: \u201cAdvice, at its core, is about helping people through the decisions that matter most,\u201d chief executive Nick Hakes says, \u201cthat part is not going anywhere.\u201d <\/p>\n
But what happens if AI gets it wrong? <\/p>\n
Hakes says we should not ignore the potential for consumer harm \u2013 on a mass scale. <\/p>\n
\u201cAs many of us already know, AI generates financial information that could be incorrect and hallucinogenic. We don\u2019t accept that as an outcome for licensed financial advice.\u201d <\/p>\n
So, where does the buck stop when it does? Will consumers be hitting up Sam Altman at OpenAI when ChatGPT recommendations create real financial harm? <\/p>\n
Well, yeah \u2013 kinda. <\/p>\n
James Blair says, \u201cIf tools like Gemini or ChatGPT are providing recommendations, they are effectively acting as a financial advice provider and should be regulated accordingly.\u201d <\/p>\n
The FMA\u2019s head of financial advice, Romil Ghelani, confirmed that: \u201cThe regulatory framework for financial advice is technology neutral. The provider of the service is responsible for ensuring the recommendation is appropriate\/fit for purpose.\u201d <\/p>\n
If it\u2019s a local firm utilising AI to make financial recommendations and they get it wrong, who the responsible party is seems straightforward enough. <\/p>\n
But when it\u2019s a giant global, tech firm that consumers are engaging with directly, that feels implausible \u2013 akin to asking Meta to take responsibility for well … anything. <\/p>\n
Whether we need new regulation to prevent that is a tricky one. <\/p>\n
The FMA says it is pro-innovation, but also acknowledges that as AI becomes more pervasive, \u201cit may accentuate existing risks or introduce new risks that are less well understood and harder to mitigate\u201d. <\/p>\n
I take that to mean we don\u2019t yet know what we don\u2019t know \u2013 and how can you regulate that? <\/p>\n
Grasping the benefits of AI while ensuring Kiwis are protected from harm without stifling that innovation leaves them walking a tightrope. <\/p>\n
So, do I need to do another dreaded career \u201cpivot\u201d before AI makes me irrelevant? <\/p>\n
Hakes says it\u2019s \u201can incredibly exciting time\u201d to be in the industry, as the untapped demand for advice has never been greater. <\/p>\n
So, possibly not. Or at least \u2013 not yet. <\/p>\n