5 Steps for Using an AI Strategy in Your Practice – Morningstar
Generative AI can help you defeat financial jargon.
As a financial advisor, you already know generative AI is not going to take your job from you. After all, we’ve seen financial advisors survive the proliferation of robo-advisors, and the job of financial planning is more human-centric than ever.
If anything, generative AI can help make financial advisors better at their jobs.
There’s been a lot of chatter about how advisors can incorporate generative AI into their work, and although many are interested, it may not be apparent where to start or what specific benefits it can provide.
Financial jargon can often feel like a necessary evil when talking with clients, but when advisors don’t take the time to clarify meaning, it can cause clients to disconnect from the financial planning process. Jargon can also make it difficult for clients to understand what vehicles they are investing in, which may lead to poor decision-making.
However, it’s not easy to interpret jargon for clients. For one, there’s the curse of knowledge, which means that it’s hard for us to remember what it’s like not to know something once we know it. Second, it can be difficult to explain technical concepts to a nonexpert without seeming patronizing.
This is where generative AI (like ChatGPT or Morningstar’s Mo) can help.
Generative AIs are very good at adjusting tone, meaning they can write well for whatever audience you specify. This makes it an invaluable tool for those looking to refine their messaging to a certain audience, such as for clients.
That said, this isn’t a recommendation to simply prompt a generative AI with something like, “Explain value investing to my clients” and then regurgitate it at your next client meeting.
Why? Well, for one, AI is not infallible. It can “hallucinate,” meaning that it can make up information, so AI responses should always be evaluated by a human for accuracy. But also, unless you’ve taken the time and effort to train the AI on a corpus of your own work, it’s not going to have your unique voice that your clients are there for.
For these reasons, it’s important to treat AI as a tool that you supervise, instead of just accepting its output at face value (a practice often referred to as human-in-the-loop). To that end, we have developed a process to help you solicit and revise explanations of jargon to clients.
After your first foray into using generative AI in practice, you may start to think of other good uses for it. But along the way, ensure you stay deeply involved in the specifics and keep your invaluable human expertise at the forefront.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
Danielle Labotka, Ph.D., is a behavioral scientist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. She conducts original research to understand how investor and advisor behaviors and biases affect financial decision-making.
Before joining Morningstar in 2022, Labotka was a research fellow at the University of Michigan working on projects funded by the National Science Foundation. Her work has been published in academic journals such as Cognition and Frontiers in Psychology.
Labotka holds a bachelor’s degree in anthropology and comparative human development from the University of Chicago. She also holds a doctorate in psychology from the University of Michigan.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.
© Copyright 2024 Morningstar, Inc. All rights reserved. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
As a financial advisor, you already know generative AI is not going to take your job from you. After all, we’ve seen financial advisors survive the proliferation of robo-advisors, and the job of financial planning is more human-centric than ever.
If anything, generative AI can help make financial advisors better at their jobs.
There’s been a lot of chatter about how advisors can incorporate generative AI into their work, and although many are interested, it may not be apparent where to start or what specific benefits it can provide.
Financial jargon can often feel like a necessary evil when talking with clients, but when advisors don’t take the time to clarify meaning, it can cause clients to disconnect from the financial planning process. Jargon can also make it difficult for clients to understand what vehicles they are investing in, which may lead to poor decision-making.
However, it’s not easy to interpret jargon for clients. For one, there’s the curse of knowledge, which means that it’s hard for us to remember what it’s like not to know something once we know it. Second, it can be difficult to explain technical concepts to a nonexpert without seeming patronizing.
This is where generative AI (like ChatGPT or Morningstar’s Mo) can help.
Generative AIs are very good at adjusting tone, meaning they can write well for whatever audience you specify. This makes it an invaluable tool for those looking to refine their messaging to a certain audience, such as for clients.
That said, this isn’t a recommendation to simply prompt a generative AI with something like, “Explain value investing to my clients” and then regurgitate it at your next client meeting.
Why? Well, for one, AI is not infallible. It can “hallucinate,” meaning that it can make up information, so AI responses should always be evaluated by a human for accuracy. But also, unless you’ve taken the time and effort to train the AI on a corpus of your own work, it’s not going to have your unique voice that your clients are there for.
For these reasons, it’s important to treat AI as a tool that you supervise, instead of just accepting its output at face value (a practice often referred to as human-in-the-loop). To that end, we have developed a process to help you solicit and revise explanations of jargon to clients.
After your first foray into using generative AI in practice, you may start to think of other good uses for it. But along the way, ensure you stay deeply involved in the specifics and keep your invaluable human expertise at the forefront.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
Danielle Labotka, Ph.D., is a behavioral scientist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. She conducts original research to understand how investor and advisor behaviors and biases affect financial decision-making.
Before joining Morningstar in 2022, Labotka was a research fellow at the University of Michigan working on projects funded by the National Science Foundation. Her work has been published in academic journals such as Cognition and Frontiers in Psychology.
Labotka holds a bachelor’s degree in anthropology and comparative human development from the University of Chicago. She also holds a doctorate in psychology from the University of Michigan.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.
© Copyright 2024 Morningstar, Inc. All rights reserved. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
