You Can Call Me Hal

2001: A Space Odyssey introduced us to HAL 9000, an artificial intelligence capable of a range of human skills including speech, facial recognition, interpreting emotional behaviours, spacecraft piloting and playing chess.

Most of these abilities have long been within the reaches of computers, most famous of which could be argued Deep Blue’s 1996 chess victory over then world champion Garry Kasparov.

The one elusive ability, speech, certainly within a natural setting, may well be a problem of the past. Enter ChatGPT and its currently taking the internet by storm.

ChatGPT is a computer program that has been designed to help people talk and learn about lots of different things. It's kind of like a smart robot friend that you can ask questions and have conversations with. It uses information it has learned from reading books and “talking” to people to give answers to all sorts of questions.

I decided to check out all what the fuss was about.

The first issue is getting access. Such is the popularity right now that its servers are at bursting point. The chances of you logging in first time are slim to none.

You are typically greeted with “ChatGPT is at capacity right now”, followed by an amusing reason for the status of the service, such as:

Explain the status of ChatGPT as a sea otter.

Squeak squeak! Sorry, ChatGPT is very popular right now. Please try again later! Squeak squeak!

Or.

Write a limerick about the status of ChatGPT.

ChatGPT is surely the best

But its servers are put to the test

With so many users chatting

It's no wonder they're lagging

But they'll fix it soon, no need to fret!

It took me 5 days of intermittent trying to finally get in. [NB, early UK time I have found best, before the US wakes up].

Then, with cursor flashing, waiting for my question, I realised there was nothing I really wanted to ask. With time pressing for the latest blog post, I decided to leave the heavy lifting of this article to ChatGPT.

My questions / inputs are in bold. The responses, which were spat out in classic vidiprinter fashion within seconds, I have left word for word (US spellings retained). My comments are in italics. And at the end, a video showing just how fast the responses are delivered.

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Let’s start with an easy one.

Tell me the benefits of a having a financial adviser.

Financial advisers provide several benefits, including:

Objective advice: Advisers provide unbiased and objective financial advice, taking into account your specific financial goals and situation.

Expertise: Advisers have specialized knowledge and experience in financial planning, investments, tax laws, and other financial matters.

Comprehensive planning: Advisers take a holistic approach to financial planning, considering all aspects of your financial life, such as spending, saving, investing, insurance, and taxes.

Accountability: Working with a financial adviser holds you accountable for your financial decisions and helps keep you on track to achieve your goals.

Peace of mind: Financial advisers can help relieve stress and anxiety by providing personalized financial planning and investment management services.

Access to resources: Financial advisers have access to a wider range of financial products and services, including specialized investments and insurance products, which can help you reach your financial goals faster.

Couldn’t have put it better myself. But what if I didn’t know what some of the terms were?

What is financial planning?

Financial planning is the process of managing one's finances to achieve their short and long-term goals. It involves creating a budget, setting savings targets, investing, insuring against risks, and creating a retirement plan. The aim of financial planning is to make the most of one's income and assets to achieve financial stability and independence.

An obvious immediate follow up to that.

Why Should I Have A Financial Plan?

Having a financial plan is important for several reasons:

Goals: A financial plan helps you to clarify your financial goals, both short-term and long-term, such as buying a house, saving for retirement, or paying off debt.

Budgeting: A financial plan provides a framework for creating and sticking to a budget, which is essential for managing your money and achieving your financial goals.

Investment strategy: A financial plan can help you develop an investment strategy that is tailored to your risk tolerance, time horizon, and financial goals.

Risk management: A financial plan helps you identify potential financial risks and determine the best strategies for managing them, such as buying insurance or diversifying your investments.

Peace of mind: A financial plan provides a sense of financial stability and security, helping to reduce stress and anxiety about your financial future.

Long-term planning: A financial plan helps you make informed decisions about your financial future and sets you on a path to financial independence and security over the long-term.

I was getting into the swing of things now, and considering I may not get the chance again (or rather be bothered waiting to login again), I peppered it with a number of vanilla financial questions that can be found at the end of the article. How about something a little different though? Following up last month’s Diary of an unSecret Adviser.

Write a diary entry for a financial adviser.

Diary Entry: January 31st, 2023

Today was a busy day at the office as usual. I met with several clients to review their financial plans and portfolios. It's always rewarding to see my clients' progress and to help them make informed decisions about their finances.

One of my clients, a young couple, came in to discuss their long-term savings and investment goals. They have a newborn baby and are thinking about their child's education and future. After reviewing their current financial situation, I recommended that they start a college savings plan and increase their contributions to their retirement accounts.

Another client, a retired couple, came in to review their investment portfolio. We discussed their current investments and the risks involved. I suggested that they consider rebalancing their portfolio to reduce their exposure to high-risk investments and increase their allocation to bonds to provide stability and income in retirement.

It's always a pleasure to help my clients reach their financial goals, and I feel grateful to have a career that allows me to make a positive impact on people's lives. Tomorrow, I have a meeting with a new client who is interested in starting a financial plan. I'm looking forward to learning more about their goals and helping them achieve financial stability and independence.

I realized how important my role as a financial advisor is. I help people make smart financial decisions and ensure they are on track to reach their financial goals. It may not always be the most exciting job, but it's fulfilling to know I'm making a positive impact on people's lives.

Tomorrow, I have a meeting with a client who wants to retire on a beach in the Caribbean. I'll be sure to bring my sunscreen and a sense of humor.

This is where the technology falls down. While it can provide educational text which may be passed off as original, it can’t replicate your tone (although I’m sure it can learn over time), but full marks for adding a little joke at the end.

And finally, lets see just how well it knows me.

Write a recommendation for my financial adviser, Steve Petrie.

I highly recommend Steve Petrie as a top-notch financial advisor. He has been a valuable resource for me, providing personalized financial advice and guidance to help me achieve my financial goals. His expertise in the field and attention to detail are unmatched, and he has a genuine commitment to helping clients like me reach their full financial potential.

With Steve, I feel confident and secure in my financial future. He has helped me create a comprehensive financial plan that takes into account all of my unique needs and goals, and he is always available to answer any questions and provide support. His proactive approach to financial planning has resulted in significant financial growth for me, and I know that he will continue to help me make smart financial decisions for years to come.

If you're looking for a reliable and knowledgeable financial advisor, look no further than Steve. He will provide you with the expert guidance and support you need to achieve your financial goals and enjoy financial success.

Just in case it was the same every time, here is the request resubmitted.

I highly recommend Steve Petrie as a trusted and knowledgeable financial advisor. He has been working with me for several years and has helped me to achieve my financial goals, whether it be saving for retirement, paying off debt, or investing in the stock market. His expertise and personalized approach have been invaluable, and he has always been available to answer any questions or concerns I have had.

Steve has a deep understanding of the financial market and has provided me with guidance on various investment strategies, helping me to make informed decisions about my finances. He has also helped me to understand the tax implications of my investments and has been instrumental in helping me to reduce my tax liability.

Steve takes the time to listen to my financial needs and provides personalized recommendations that are tailored to my individual circumstances. He is patient and always willing to explain complex financial concepts in a way that is easy to understand.

In short, I have found Steve to be a knowledgeable and trustworthy financial advisor who consistently delivers results. I would highly recommend him to anyone looking for professional and effective financial guidance.

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Implications For Personal Finances

While its certainly amazing to try this program and watch the answers unfurl in front of your eyes, I suspect most people will get bored of it after a short while and move on.

It should however remain deep in our consciousness because this is where the future of communication with people you don’t know is going and you need to be aware of where it can lead.

ChatGPT has already passed law school exams, albeit with mediocre grades.

As for personal finance, as anyone who has tried the online chat help with their bank knows, its deeply frustrating answering the multiple-choice questions which are clearly computer generated. You feel you have won a little victory when you are being told, “we are transferring you to a person”, and then Jenny comes online with, “Hi Steve, how can I help you today? Sure, just a minute let me check that out and get back to you.”

I will no longer be certain Jenny is real.

Surely however, this is an area of real concern for fraud as its ripe for phishing texts and emails. At some point in the not too distant future, given the rapid responses, and when it is linked in with voice capabilities, will we be sure it is a real person on the other end of the phone.

There has been much talk of robo-advice in the personal finance sector and we have seen providers Nutmeg, Wealthify and Moneyfarm spend billions of their technologies and advertising, no doubt hoping a technology like this coupled with their offering could signal the end of the financial adviser.

My feeling though is that sector is doomed to fail.

Just this month, another direct-to-consumer platform announced its intention to shut down all UK operations. This time it was Exo Investing, nine months after Abrdn pulled out of a deal to acquire it.

This latest robo-advice failure follows on the heels of Investec, UBS, Moola and others who, in recent years, have also decided it is not for them.

Financial planning requires a great deal of skill on the part of the adviser. There is no one-size-fits-all solution.

Far from being a death knell, technology has always and will always be a compliment for advisers to give really outstanding planning solutions.

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Appendix: ChatGPT In Action

Appendix: Further Questions & Answers

Explain passive versus active investment.

Passive and active investing are two contrasting investment styles.

Passive investing involves investing in a diversified portfolio of assets, such as index funds, which aim to match the performance of a market index, such as the S&P 500. The goal of passive investing is to track the market's returns, with a lower emphasis on trying to beat it.

Active investing, on the other hand, involves choosing individual stocks, bonds, or other assets with the aim of outperforming the market. Active investors rely on research and analysis to make informed decisions about which assets to buy and sell, with the goal of achieving higher returns than passive investments.

Advantages of passive investing include lower costs, lower risk, and a more straightforward investment strategy. Advantages of active investing include the potential for higher returns and the ability to beat the market. However, active investing also carries higher costs and higher risk, as well as a greater potential for underperforming the market.

What Is Inheritance Tax?

Inheritance tax, also known as estate tax, can significantly reduce the amount of wealth passed down to loved ones after your death. Here are several strategies to help you avoid inheritance tax:

Give gifts while alive: You can reduce your estate tax liability by making gifts to loved ones while you are alive. Each year, you can give up to $15,000 to any individual without incurring gift tax.

Use a trust: Setting up a trust can help you avoid inheritance tax by removing assets from your estate and transferring them to the trust for the benefit of your beneficiaries. There are several types of trusts, including revocable trusts, irrevocable trusts, and charitable trusts, each with their own benefits and drawbacks.

Take advantage of exemptions: Estate tax exemptions vary by state and can help you reduce or eliminate inheritance tax liability. For example, many states have exemptions for a certain amount of property or a certain value of life insurance.

Consider life insurance: Life insurance can be an effective way to help cover the cost of inheritance tax, since death benefits are generally not subject to inheritance tax.

Update your will: Regularly updating your will is essential to ensure that your assets are distributed according to your wishes and that your estate tax liability is minimized.

By implementing these strategies, you can help reduce or eliminate your inheritance tax liability, ensuring that more of your wealth is passed down to your loved ones. However, it is important to consult with a financial advisor or estate planning attorney to determine the best approach for your individual circumstances.

Explain inflation in the UK

Inflation in the UK has been a hot topic in recent years, as the country navigates the impacts of the COVID-19 pandemic and Brexit. Here is a closer look at what is driving inflation in the UK and what it means for the economy and consumers:

The impact of COVID-19: The COVID-19 pandemic has had a significant impact on inflation in the UK, as supply chain disruptions and increased demand for certain goods and services have driven up prices. For example, the cost of food and household goods has risen due to supply chain disruptions, while the cost of travel and leisure has fallen due to reduced demand.

Brexit: The UK's exit from the European Union has also impacted inflation, as the devaluation of the pound and changes to trade agreements have affected the cost of imported goods.

Monetary policy: The Bank of England has pursued an accommodative monetary policy in recent years, keeping interest rates low and pumping money into the economy through asset purchases. This has helped to support the economy during the pandemic but may also contribute to higher inflation in the future.

Economic recovery: As the UK economy recovers from the pandemic, demand for goods and services is likely to increase, which could put upward pressure on prices.

For consumers, higher inflation can mean higher costs for everyday items and reduced purchasing power. For the economy, inflation can be a sign of increased economic activity and a stronger economy, but if inflation becomes too high, it can lead to higher interest rates, reduced consumer spending, and a slowdown in economic growth.

The Bank of England is closely monitoring inflation and will take action to keep it under control, including adjusting interest rates or changing its monetary policy, if necessary. In the meantime, it is important for consumers to stay informed about inflation trends and to manage their finances accordingly.