Financial firms are developing AI tools to help clients with planning for the future and save for retirement. As part of Yahoo Finance’s Retirement Readiness series, Golden Retirement Advisors Inc. President Jerry Golden outlines the risks associated with automating retirement planning, noting that AI “does not distinguish between saving for retirement and living in retirement”. Golden goes on to say, “We don’t see how a.i. today can interact with real clients and hear their objectives.” Although weary of artificial intelligence acting as a consultant for retirement, Golden believes AI models can aid in optimization and better personal finance planning for individuals.
Video Transcript
[MUSIC PLAYING]
– Robots may not be taking over your retirement just yet, but several big financial firms are leaning into the technology. Our next guest says despite this, there are several reasons should not trust AI with your planning just yet. Jerry Golden– Golden Retirement Advisors President joins us now. Jerry, great to have you here with us today. Why shouldn’t people quite lean into AI to trust their retirement planning just yet?
JERRY GOLDEN: No. I think there are lots of reasons, but I’ve identified three. I think one, the model that we’ve seen does not distinguish between saving for retirement and living in retirement. And we believe there are two very different models. Secondly, we don’t see how AI today can interact with real clients and hear their objectives, hear their needs, and to construct a plan for them.
And third, AI, that we’ve looked at is a language model, not a math model. So it’s not able to analyze performance. And the version that we looked at, the cut off was September of 2021, and as we all know, the performance since then has been a roller coaster for stocks and Treasury yields have gone up. So it’s got to be real time in terms of market performance.
JULIE HYMAN: Jerry, it’s Julie here. What about advisors using AI as a tool? Does that make sense? Is there any case to be made for that?
JERRY GOLDEN: Yeah. We believe in the long run. If you start with a basic model of– a planning model that AI can be very helpful in making the advisor more efficient and doing the analysis of all the possible objectives and needs of the client. But again, that presumes that the starting point, the model makes sense. But eventually, it could be a boon, both to advisors and to investors.
– And so then how should people be viewing AI when it comes to their retirement planning? Because for some people, they haven’t started planning at all. Should they be looking at it more as a co-pilot to sort of get basic questions answered versus, say, trying to find an AI replacement as they do with say, starting to do taxes and things?
JERRY GOLDEN: Yeah. How we’ve used I, and I don’t know if we’re representative investor, is when we’re writing a blog or a piece for our investors, we pose the question to AI, in our case, the ChatGPT. And the answers we got are very helpful. They give you the list of seven or eight items you ought to think about, your cookbook, so to speak. So they’re a very useful starting point of what somebody should think about. But they’re very far today from the end answer in terms of the plan you might adopt.
– Where might I play a role in avoiding pitfalls that other people have made that have similar, perhaps, parameters that are set up with regard to some of their retirement goals and where they are currently at in either their saving or their financial structure?
JERRY GOLDEN: Yeah. The way we see it, and we’re a model builder or a planning builder, and what we see is there are– and literally, I hate to say that, but trillion combinations of planning. What AI can do, and maybe it’s more in the form of a supercomputer, can look at all of those options. And based on the client’s needs and objectives, optimize their outcome by, you know, looking at these literally zillions of options so it can be, in our view, ultimately have a plan that better fits the investor’s needs and objectives.
– And so obviously, we’re still in the earliest iterations of ChatGPT style of chat bots and AI assistants here. But do you see it, perhaps, one day taking over retirement planning, when it gets more advanced?
JERRY GOLDEN: We think about the process from end to end. So first, you’ve got to attract the investor to your AI tool, you’ve got to learn about them, you’ve got to– if you follow a [INAUDIBLE] model optimize the solution, you have to talk to them about execution, you have to look where they are currently invested and move to the new [INAUDIBLE]. So we see, in the entire process, places where AI can add value, but we don’t see a full end-to-end replacement.
– All right. We do appreciate you joining us there. Obviously, it’s still early days yet. Sort of still in that sort of co-pilot mode. But definitely some things to keep track of there. Jerry Golden– Golden Retirement Advisors President. Thank you for your time this morning.
JERRY GOLDEN: Thank you.
