‘It’s up to us to determine whether AI works for us or against us’
Andrew Goodwin reflects on the rise of AI in wealth management through the lens of 1960s classic sci-fi show, StarTrek
Maybe the most celebrated is The Ultimate Computer, in which the USS Enterprise is equipped with an M-5 Multitronic Unit – a state-of-the-art system tipped to replace most of the crew. Here, as is customary in every instalment of this ilk, AI is portrayed as somewhat less than perfect.
The M-5 misinterprets a war-game simulation as an actual attack and responds by firing on another vessel, killing several personnel. Fortunately, the ever-resourceful Captain Kirk prevents an even greater tragedy by outreasoning the machine in a profound philosophical discussion – eventually persuading the M-5 to shut itself down.
From Star Trek to Dark Star to 2001: A Space Odyssey and many more besides, the message seems unequivocal: AI isn’t to be trusted. It’s at best flawed and at worst crazed, megalomaniacal and very probably completely evil.
Even allowing for the possibility that not every financial adviser is a devoted Trekkie, this kind of thinking continues to hang over our industry. Like Kirk, many advisers feel AI has been foisted upon them and could one day prove their undoing.
Separate science fiction from science fact
But we ought to separate science fiction from science fact for a moment. The reality right now is that we don’t have any meaningful evidence that AI will serve as a destructive force.
What we have instead, both within the sphere of financial advice and more broadly, is evidence that the effectiveness or otherwise of AI is still very much in our hands. In other words, it’s up to us to determine whether AI works for us or against us.
By way of illustration, let’s start with the big picture. Back in August last year, in a study that rocked the world’s top stocks and ignited fresh fears of a tech bubble, the Massachusetts Institute of Technology (MIT) reported a 95% failure rate among businesses’ generative AI pilot schemes.
This was widely interpreted as proof that AI’s long-term ability to add value and deliver substantial productivity gains has been overestimated. Various prophecies of doom ensued, with even the International Monetary Fund adding to the chorus of negativity.
Yet MIT’s researchers were careful to point out that responsibility for AI’s lack of positive impact shouldn’t necessarily be laid at the door of AI itself. More often than not, they said, the blame could instead be traced to how companies have chosen to implement AI.
This issue has recently become all too apparent at a more individual and headline-grabbing level. Witness the furore surrounding the use of Grok, X’s AI assistant, as a means of creating sexualised images.
I guess the question is essentially this: if you have at your disposal a technology capable of all sorts of wonderful things, is the technology itself at fault if you use it for the wrong purpose? I don’t think so.
In most instances, ultimately, how to derive maximum utility is almost entirely our decision. As has been the case since the dawn of computing, put garbage in and you’ll get garbage out.
Reflecting this rule, it’s also vital to establish whether a specific AI package is fundamentally geared towards realising our goals. In the advice arena, as I wrote last year, it’s easy to encounter supposedly cutting-edge products that are wholly unsuited to our needs.
Informed choices
In the end, then, this is about making informed choices. It’s about using the right AI in the right ways so that we can genuinely improve how we work and, crucially, how we deliver advice to the people who place their trust in us.
That’s how we’re most likely to disprove the enduring notion that AI must be demented, power-hungry and harmful. It’s how we’re most likely to survive and thrive. It’s how we’re most likely to maintain and enhance our profession without having to resort to Kirk-like metaphysical showdowns – which is probably for the best, as my William Shatner impression isn’t what it used to be.
Will we one day be able to boldly go where no adviser has gone before? Perhaps. At the very least, we should be able to make life easier for ourselves and markedly augment our capacity to meet – and even exceed – our clients’ expectations.
Andrew Goodwin is co-founder and CEO of Truly Independent and the author of ‘The Happy Financial Adviser’
