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AI financial advice is surprisingly good, especially if you ask right questions

mitsloan.mit.edu

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Re: AI financial advice is surprisingly good, especially if you ask right questions

#351

Post by foxtrot8672 »

quickthrowman wrote: post #347
foxtrot8672 wrote: post #334

Earlier quoted context omitted.

Our AI, Pendragon ( https://pendragon.foxtrotcommunications.net/ ) doesn't stop at one and done interactions. It actively works to get to know you and your household's finances so that it can build an effective model. It also produces confidence scores based upon what it knows (and what it doesn't) to always give you a complete picture. The more information you give pendragon the better your answers will be. Pendrago…

Who are you selling the conversation logs and customer info to? If you’re not selling customer financial data (yet), how much are companies offering you for it? I’d rather get no response than be patronized, so no linking to corporate policy documents on your website please.

we don't sell customer information on an individual level, and I can't disclose the details of any potential deals. The most we would consider would be aggregated and anonymized decision data, such as what families value the most, but we would always treat correct PII handling as an absolute requirement. We aren't selling any information right now.

I know you said that you don't want a TOS link, here's something better. This is our constitution. https://pendragon.foxtrotcommunications.net/constitution

Re: AI financial advice is surprisingly good, especially if you ask right questions

#352

Post by inigyou »

Pragmata wrote: post #345
inigyou wrote: post #339

Earlier quoted context omitted.

Texas, for example.

Please link the relevant law that makes it illegal to be homeless in texas.

https://legaloverview.com/is-it-illegal-to-be-homeless/

Re: AI financial advice is surprisingly good, especially if you ask right questions

#353

Post by francisofascii »

mvc wrote: post #312

I think you gotta be pretty lucky or disciplined with a high income from an early age to be in a position to start unloading risk at 45. Most folks don't have disposable income after rent and bills until they're 30.

Agree, that advice seems to be targeting folks who have had a 401K since they were 22. Also, I think it is basically saying the point where you start adjusting your stock/bond ratio down. At 40, maybe you have 80% in stocks, and change it to 75% when you turn 45.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#354

Post by foxtrot8672 »

hypercube33 wrote: post #348
foxtrot8672 wrote: post #334

Earlier quoted context omitted.

Our AI, Pendragon ( https://pendragon.foxtrotcommunications.net/ ) doesn't stop at one and done interactions. It actively works to get to know you and your household's finances so that it can build an effective model. It also produces confidence scores based upon what it knows (and what it doesn't) to always give you a complete picture. The more information you give pendragon the better your answers will be. Pendrago…

I look forward to more models like this but don't take this the wrong way, I'm not touching this with a 10 foot pole unless it's running locally on my private hardware.

I see. Do you not trust the cloud, the data storage layer, or is it the AI model itself?

Re: AI financial advice is surprisingly good, especially if you ask right questions

#355

Post by traceroute66 »

hibikir wrote: post #123
kccqzy wrote: post #70

Earlier quoted context omitted.

This is the common fallacy of “AI is terrible in my own field of which I have deep knowledge, but AI is totally fine in this other field of which I only have cursory knowledge.” Even ignoring all other aspects of financial advice and only focus on saving for retirement, there are so many topics involved like asset allocation glide paths, tax advantaged accounts, safe withdrawal rate, sequence of return risk, etc etc.…

You are comparing to the almighty, not to the kind of financial advisor most people would find while looking at random. Between those with very high AUM fees, those selling bad vehicles that they get kickbacks for and such, people are basically getting robbed already. It's not that one cannot get very specific, technical advice that helps, but someone without much financial literacy cannot tell someone doing honest w…

> the kind of financial advisor most people would find while looking at random

Any regulated financial advisor will still go further and deeper than any LLM.

For example, most (all ?) LLMs won't even consider or ask you about applicable jurisdiction, which could easily end up as dangerous and costly advice.

Will an LLM do a proper client risk assessment ? Probably not.

Will an LLM deal correctly with vulnerable clients or PEPs ? Unlikely.

Will an LLM deal correctly with anything vaguely "complex" or contentious ? Definitely not.

And again, the financial advisor is regulated. Which means you have recourse through the regulator, and the advisor will also have liability insurance.

The LLM meanwhile ? Yeah, about that...

Re: AI financial advice is surprisingly good, especially if you ask right questions

#356

Post by groundzeros2015 »

inigyou wrote: post #330
Pragmata wrote: post #325

Earlier quoted context omitted.

I can assure you, in most places you will not be fined or put in prison for not having a home. In most places the local council, or charities will help provide you shelter even if only on a temporary basis. Your statement is not in line with reality.

Have you been homeless?

Many people go through a “homeless” period of not having a permanent address. Couch surfing. Motels etc.

It’s not fun. It’s very stressful. Our systems have a positive feedback loop against financial instability.

However there is another category of homeless which is a person pushing a shopping cart on the side of the road. And this is an exteme level of dysfunction and despair.

I saw a tweet that summarized this issue as “you’re as likely to become a CEO or NBA player as you are to become homeless.” Meaning that it’s a track of genetics and behavior resulting in dysfunction several standard deviations away from normal.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#357

Post by megapolitics »

inigyou wrote: post #316
donkey_brains wrote: post #313

Earlier quoted context omitted.

That’s why that’s not the standard advice. It’s index stocks hedged with bonds. If you manage to buy at the “top” of your entire country’s economy, you’ve got bigger problems at that point.

Buying after any previous crash, instead of before, gave you 10-20 years of extra retirement. If you waited 10 years in cash for a crash before going all-in, you came out ahead.

Does that assume that you're able to perfectly time the investment with the market bottom?

Re: AI financial advice is surprisingly good, especially if you ask right questions

#358

Post by groundzeros2015 »

inigyou wrote: post #311
swat535 wrote: post #189

Earlier quoted context omitted.

The problem with giving financial advice to people is that many struggle to pay their rent. Telling them to invest in index funds from an ivory tower is laughably misguided of the realistic situation they live in. After they pay their rent and feed themselves, they may have a little left over which they will simply spend on basic pleasures, or simply rack up debt to get by. The financial advice ignores the fact that…

The EFF: "Uyghurs in China can use PGP to protect their communications from the government." Some Uyghur in China: "There's a government representative who lives in my house and watches over my shoulder whenever I use technology."

Nowhere is anyone saying this.

Yes if you’re poor you are not in the market for a financial advisor. You’re also not in the market for a dentist or family doctor. These are services for middle class people.

This is not a thread about class grievance.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#359

Post by quickthrowman »

foxtrot8672 wrote: post #351
quickthrowman wrote: post #347

Earlier quoted context omitted.

Who are you selling the conversation logs and customer info to? If you’re not selling customer financial data (yet), how much are companies offering you for it? I’d rather get no response than be patronized, so no linking to corporate policy documents on your website please.

we don't sell customer information on an individual level, and I can't disclose the details of any potential deals. The most we would consider would be aggregated and anonymized decision data, such as what families value the most, but we would always treat correct PII handling as an absolute requirement. We aren't selling any information right now. I know you said that you don't want a TOS link, here's something bett…

Thanks for the honest response, I appreciate it! It’s a great idea for an AI tool and as long as you aren’t selling directly identifiable data, I don’t see a problem with using it.

I worry about my data being sold if I used a tool like this, but I should probably be more worried about my actual credit card purchase data being sold (because it is).

Re: AI financial advice is surprisingly good, especially if you ask right questions

#360

Post by francisofascii »

DonsDiscountGas wrote: post #65
networkOne wrote: post #25

Yes, financial planners will be one of the first industries to totally revamp itself because of AI. $2,000 for some SoA which is 99% boiler-plate? No thanks. I spent years in this industry, and the advice from these 'experts' is demonstrably poor.

Lol. You don't even need AI for that 99% boiler plate. Save 6-12 months of expenses in cash, DCA the rest into total market stock index funds. But people still pay expensive advisors to get worse results.

The tricky part is which total market index funds? The S&P based ones are too AI focused, and don't give you the diversification they once did. You also don't want to invest in just one countries stock market. And bonds, should be a mix of maturity, governments (not just the US), corporate, etc.
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