Have a Retirement Question? AI Can Answer That
Not sure if you should open an IRA or throw more money to your 401(K)? Uncertain when you should start collecting Social Security? Questioning what your asset allocation should be in your retirement savings account?
Artificial intelligence can answer that.
From ChatGPT to Gemini, retirement savers are increasingly turning to AI for help with their financial planning questions. They are asking these large language models (LLMs) all sorts of questions about their finances hoping to get the answers typically provided by financial advisers.
Subscribe to Kiplinger’s Personal Finance
Be a smarter, better informed investor.
Save up to 74%
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
That isn’t going unnoticed from fintechs to traditional financial institutions that are leveraging AI to level the playing field in retirement planning.
They are using AI to help people plan for retirement, sometimes eliminating the need for a wealth adviser. Additionally, they are empowering financial advisers by automating tasks, freeing them up to spend more time with their clients.
“AI is democratizing access to wealth management that is reserved to the 1%,” says Fahad Hassan, CEO and co-founder of Range, the wealth management company. “The beauty in AI and tech is that everyday consumers get chat experiences that they can understand.”
That’s not to say AI is perfect. LLMs like ChatGPT and Gemini have their weaknesses. ChatGPT can run into trouble generating reliable and accurate answers while Gemini has limitations with common sense and real-world experiences.
What’s more, neither can replace the insight and institutional knowledge that humans bring to the table, particularly with financial planning.
“Personal finance elicits lots of emotions, and retirement planning, especially, can be confusing, overwhelming and complex for many. So, the personal, human touch of the adviser will remain integral to a financial planning experience,” says Matt George, head of Product at Edelman Financial Engines. “However, AI does provide the opportunity to make the client experience and the adviser experience better.”
AI’s role in retirement planning
Love it or hate it, AI is becoming part of the retirement planning process. Here’s a look at how some companies are leveraging AI to help you prepare for your golden age.
Boldin
What it does
Geared toward everyday investors and retirement savers, Boldin is a financial software program that uses AI to help you plan, invest and manage your finances.
The company offers a free basic plan that gives you access to retirement calculators and planning tools. For $10 a month, you can use the PlannerPlus service, which lets you input more financial information about yourself and create a more detailed retirement plan. At the top tier is the BoldinAdvisors service, which costs a flat fee of $2,500 and gives you access to a fee-only certified financial planner (CFP). It also offers retirement planning coaching sessions for $250.
How it uses AI
“We’re using an AI agent for support to answer questions when customers are building a financial plan,” says Stephen Chen, founder and CEO of Boldin. “When they are going through it they will have questions about their situation: should I claim Social Security, what are RMDs, and will ask inside the platform.”
Chen says Boldin’s AI agent has ingested thousands of previous questions answered by humans and thousands of articles to provide clients with answers to their retirement questions.
How’s it going
In a recent week out of 955 tickets (questions asked by Boldin customers), 57% were handled by an AI agent and 43% were handled by a human agent. Of the questions answered by an AI agent, Boldin said 65% were resolved without the need for human intervention while 35% required the helping hand of a real-life person.
“Every company is thinking about AI right now and how to use it. Some companies are more serious than other companies,” says Chen.
Where it’s going
Boldin doesn’t plan to keep its AI at the customer service level. The company is looking at ways to leverage AI to create a more personalized experience for customers, pulling from their financial data provided when they open an account. They are also looking at using AI to provide coaching to clients.
“Helping keep people on track is a big part of the value of a human financial adviser. AI can be good at that and in the future with agents it might help you do things like make a transfer or investment,” says Chen.
Range
What it does
An online financial wealth management firm that melds human advice with technology, including AI to create comprehensive financial plans. Range targets wealthy households, and has three plans ranging from $1,475 semi-annually to $4,975 semi-annually. Users get access to its team of fee-only advisers, tax, investment and retirement planning experts, and several tools and calculators among other wealth management services.
How it’s using AI
“We’re trying to supercharge wealth advisers by improving the technology wealth advisers have,” says Hassan. Currently the company is using AI internally, building a comprehensive AI tool for its financial advisers to make better and quicker decisions for its clients.
“We took input from advisers at Goldman Sachs and JPMorgan who are used to working with high net wealth clients. We wanted it to be insanely comprehensive,” says Hassan.
How’s it going
Range says the use of AI speeds up thoughtful, hyper-contextualized and hyper-personalized responses for clients. The company leverages its previous conversations with clients, financial data, adviser input and AI, to provide client advice that is 30% faster.
Where it’s going
Range is currently reserved for high-net-worth individuals, but it won’t be like that forever. Hassan has a vision of leveraging its AI model to provide retirement advice to the masses, not just wealthy individuals. That could mean a free version of Range to more affordable ones depending on the customer’s income and assets.
Stay tuned, Hassan says Range could be making a move on that front this summer. “The goal is to democratize wealth management,” he says.
Edelman Financial Engines
What it does
A Registered Investment Advisor or RIA firm for over 35 years, Edelman Financial Engines offers investors and retirement savers an array of financial management services including retirement planning with real humans. The fee-only financial adviser has over 1.3 million customers around the country and manages $290 billion for its clients.
How it uses AI
“We are mostly leveraging AI on the backend of our operations to help improve the client experience,” says Matt George. “Today we are looking at AI as a tool to help our advisers be more effective and efficient.”
Let’s say you want to know how much your monthly retirement income will change if you retire three years earlier than you had initially planned. With Edelman’s technology and an assist from AI on the back end, clients can see the impact in real time.
How’s it going
Edelman Financial Engines is using AI to help advisers with time consuming administrative tasks, freeing them up to spend more time focusing on the client relationship.
George says AI has been effective in rapidly summarizing meeting notes into client’s files and helping advisers prepare for upcoming meetings.
“We will continue to leverage AI to gather more and more accurate inputs to continuously improve our advice without putting an additional burden on our clients,” says George, noting AI can be used to help inform its advisers when it’s time to revisit and/or refine a financial plan.
Where it’s going
Edelman Financial Engines has Silicon Valley roots and has leveraged technology to develop digital planning and investment tools, but for now its focused primarily on leveraging AI internally to improve operations, client experience, adviser experience and to help its employees better manage their day-to-day responsibilities.
“We are taking a holistic and thoughtful approach to how we evaluate and implement AI at Edelman Financial Engines with our client’s best interest in mind,” says George.
The robots won’t take over anytime soon
While AI holds a lot of promise for the future of retirement planning, all of these industry players agree there will always be a need for human hand holding.
Sure AI can tell you how a stock is performing or how much you’ll earn if you delay collecting Social Security, but it can’t walk you off the ledge if the Dow Jones Industrial drops 1,000 points or stop you from collecting Social Security benefits early out of a fear the system will become insolvent.
But humans can.
Learn more about AI
Source link
