Professional Adviser recently reported on the potential role of Artificial Intelligence (AI) for the financial planners of the future.
With the rise of robo-advice, chatbots, the increased role of social media, and, more recently the headline-grabbing ChatGPT, the topic of technology is an important one to be discussing.
Arguably, even more so after the so-called “godfather” of AI, Dr Geoffrey Hinton, quit his job at Google to speak freely about the dangers of AI and the “existential risk” he says it poses to humanity.
In the short term, the rise of technology has already been acknowledged by the Financial Conduct Authority (FCA), whether in protecting against social media and cyber scams or acknowledging the need for Consumer Duty in a changing landscape.
But what does the rise of tech mean for your finances?
Keep reading to find out.
1. Cyber scams are increasing with individuals and businesses falling victim
The Independent recently reported that Britons lost a staggering £177 million to impersonation scams in 2022.
Impersonation scams involve fraudsters pretending to be from organisations like the police, government, or NHS, to trick you into parting with your money.
One particular type of impersonation scam – known as a “clone firm scam” – sees fraudsters purporting to be a reputable firm, possibly within the financial services profession.
FTAdviser confirms that a genuine, FCA-authorised firm called Premier Group Financial Services Ltd was recently cloned.
The clone firm had no association with the genuine company but contacted clients claiming to be able to help them reclaim – of all things – money lost to scams, showing just how unscrupulous these fraudsters can be.
Websites can be cloned to look like they belong to a genuine company, but certain details like phone numbers and email addresses will be different (and change regularly). Always check the FCA register to ensure the details match before responding to any correspondence, even if it claims to be from your provider.
As a business owner, you should also be sure your staff are trained to spot potential cyber scams as the effects of fraud on your business could be huge.
2. Social media “advice” is increasingly popular but should be avoided
Back in April, you may have read ‘3 reasons why you shouldn’t take financial advice from social media’ in which we looked at the rise in social media scams.
You will have read that 51% of UK investors admitted turning to social media for investment advice. And yet, we also reported that during 2022, the FCA targeted more than 10,000 social-media-based scams and “misleading” financial promotions, a huge rise from the previous year.
Remember that your financial plans are individual to you and based on your long-term goals. A two-minute stock trading video on social media isn’t a substitute for talking to your qualified financial planner.
The “advice” you receive online won’t contain the necessary risk warnings and is highly likely to be unregulated, meaning that you won’t be protected if something goes wrong. You also open yourself up to the possibility of being scammed.
Remember too, that robo-advisors, and even money experts like Martin Lewis, don’t know your personal circumstances. That means they’re not best placed to advise you.
Speak to us if you have any questions or concerns about your finances.
3. The rise of AI might speed up or alter our processes but you’ll still be able to talk to a human
The headline-grabbing capabilities of AI tools like ChatGPT may have captured imaginations but it’s important to remember that these technological advances are only tools.
At Fingerprint Financial Planning, we take the time to get to know all of our clients so that we understand your objectives. From that starting point, we can build a path to help you achieve your goals in a way that aligns with your desired lifestyle now and in the future. That requires a human touch and regular human check-ins.
The financial services industry has always been forward-thinking and innovative.
In the future, AI tools might speed up some of the admin work we do for you or improve cashflow modelling forecasts. Maybe facial recognition and diagnostic software will become part of the mortgage application or claims process?
Either way, your finances will, ultimately, be in a safe pair of (human) hands.
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The value of investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.