Hi, everyone. I'm Ed Slott along with Jeff Levine, and welcome back to the Great Retirement Debate. Jeff, we're in season five, and what are we kicking it off with? I think today we're gonna discuss AI. We're gonna we're gonna ask the question, can AI, or maybe should AI replace your advisor? Plot twist, it's not really us, it's AI. Right, Ed. So what do you think? Well, there's a lot of information out there. No question about it. I am not by any means an AI expert. I think with AI, working with a lot of financial advisers, it can help them with a lot of administrative type tests to speed up the process and make it a better client experience. But like with anything, even with tax planning and actually doing tax returns, you need somebody that knows what's supposed to come out to be able to see, does this make sense? Is this even valid? So there's a point for it, but you've gotta watch it because from what I see, for example, I see things where AI only tells you what ask it. You say, am I doing a good job? Oh, you're doing the best. There is definitely a sycophant nature to the AI And that's a built in, it's almost like junk food is created to make you want more junk food, right? Yeah, me more. I'm doing great. Oh yes, your investments are up three hundred percent. That's right now. Oh great. Now you want to pay attention to the AI more. So yes, I think that is one of the major issues that the research has uncovered is that it does tell you a lot of what you want to hear, even if that what you want to hear is not correct. I think but Ed, one of the things that to me is the most problematic, right? Like there's the technical element of this, and we'll get there. But there's also a huge, huge component of advising that is not technical based. It's behavioral finance. It is psychology. It's understanding nuances of an individual's personal perceptions. And look, and I've read the articles of in the future, you're going to be able to to talk to your AI. Your AI is going to be able to look at your face and go, oh, that person's not really telling me the truth because of the way their eyes are moving or the way the wrinkle is, and and the AI is going to be able to interpret. Like, maybe you just had a twitch in your eye. Like, there is a lot of this where a human advisor humans still connect best with humans. That is a built in biological thing that is going to take thousands, if not millions, of years to change in the way of the way our genetics play out. So I think ultimately, there is that role for the adviser where it's about more coaching. Right? It's less maybe about finding that perfect technical answer. And I don't think AI is there yet. But even if AI could, in theory, provide every single correct technical answer, it's the doing things. There's a great book. Doctor Moira Summers wrote Advice That Sticks. For anyone who hasn't read it yet, I would strongly suggest that they do so. And she was a physician who basically was frustrated with the fact that people weren't taking the medical advice. And she looked and started getting into, finance and whatnot. And I think, don't quote me on this, and statistic is directionally accurate. I think it was something like eighty percent of financial advice you said goes unimplemented. If it's not eighty percent, whatever it is, directionally that's the idea here. And part of the reason is because you leave people to their own devices, and they just things go away. AI cannot do that. It actually it can't do for you. It can help coach you. It can help get you the answers. But at the end of the day, that human adviser is still going to be the best to hold you accountable. And you know what, Ed? If you're using AI and it goes wrong, here's the best thing. It's only you to blame. It's unaccountable. That's right. There are a lot of people out there who need somebody else to blame if something goes wrong. Yeah, let me go back. You hit an interesting point, I've had experience with, the doctor example. I've had many, as you know, doctor clients, as tax clients over the years, and I've done the estate planning and tax planning, And they too don't take the advice. So it's funny, a doctor wrote that and I remember telling a client once, I said, You know, if I came into your office and I had something and you prescribed something and I didn't want to pick up this prescription or use it, what would you say? What are you crazy? But I'm telling you what to do. Do this, that, and they don't do it. So look in the mirror for that stuff. But it's the relationship. It's very hard to replace a personal relationship. And people, we're talking about the great retirement debate, right? Retirement being the keyword. That involves where huge sums of money in IRAs, 401s, Roth IRAs. This is not only one of the most complex areas of the tax code, but the most unforgiving. Some mistakes are permanent, unchangeable, etched in stone. You're not going to have a second chance. Here's a perfect example. You ask AI should I do a Roth conversion? Oh yeah, you're very smart. And you convert two million dollars of your two million dollars IRA. You can't undo that. You can't go back to AI. I have this tax bill, maybe I should have done less. You're right, you should have done less. You know, I liken this AI revolution almost to the rise of robo advisors about ten or fifteen years ago. About ten or fifteen years ago, there was this great concern on the part of financial advisers that robo advisers were going to replace them or that they were going to have to work for a large part for like twenty basis points, meaning, like, you know, two tenths of one percent to to be equivalent to the robo advisers. And what ultimately happened was the technology behind the robo advisers was awesome, But people the adoption wasn't there. And what you ended up with was most of the robo advisors were actually purchased by human advisors, human advisor firms who said, that technology is awesome. If we use that, think of how much more we will be able to help our clients. Think of how much deeper we'll be able to go. Because now we don't have to spend all of our time trading. We can actually use it to do things like help them to go deeper with their tax planning, help them to go deeper with their estate planning. And indeed, that's what we've seen, an evolution towards the adviser being able to do more and accomplish more and go deeper for individuals because they let technology handle some of the other stuff. Right, like the administrators. That's right. Research. For research. Absolutely. So I think AI ends up doing a lot of it has a similar progression. Does AI replace your advisor? No. But I do think that AI is going to empower your advisor to do in ten years, you know, two, three times the types of work that they could do for you today because they are able to spend their time doing those things that only they can do uniquely well. AI is a cool tool where it is useful. For efficiency. That's right, for efficiency. But it's very hard for me to imagine a scenario where you just talk to your robot overlords and you do exactly what they want. Not over what may be the largest account you've ever owned. Not only that, AI is not a long term planner. They react to world events. Oh, there's a war, you should sell everything. Stuff like that is coming out, we see. Retirement is a long term big plan. You have to plan with the end in mind. What do you want for your kids and grandkids? How far out should this go? Yeah, and look, it's going to evolve over time. It is getting better. It is scary how quickly AI is developing. I kind of joked as we were starting here, it's not even us. But the reality is in a few years, it could really not be us, and people might not know it. But we are not there yet. AI, the research still shows when when all the financial journals and whatnot, when they go and they do peer reviewed research and they ask AI questions and they do the analysis of how correct is it, it's still not there yet. But it's also user error in a lot of cases. Garbage in, garbage out. Garbage in, garbage out. Yeah. You have to know what to ask for years. That's the key. You've got to know to ask the right questions. And eventually, maybe AI will get there too and say, Did you mean to ask this? But we're just not there. For years, I would tell people, one of the most important skills you can have is to be a good Googler. Today, it's to be a good user of AI That's true. Prompt it correctly, to ask it to answer in the right capacity. And in that vein, AI is very strong. The idea that it's look, I think here's my ultimate argument or where I ultimately reside on this, Ed, because I know we've got to come to a decision here. For me, AI, artificial intelligence, is still no replacement for AI, actual intelligence. That's a point. Ultimately, I think there's room for both. AI just continues to be a tool that empowers us to do more, better, and deeper, but your human advisor is still your human advisor. Whether that be a tax advisor, a financial advisor, a legal advisor, I don't see any of those professions going on anytime And that's even more true, like I said, with a retirement account because it's loaded with tax planning and tax strategies and tax rules. They're very complicated and they're always changing. Can you imagine an AI blaming your AI for I'm sorry, I've to cut it from right there. You want to just go to the end or? What does AI say? Yeah. All right, Ed. Well, my AI is telling me that it is time for us to wrap up this episode. What do you think? I think AI is telling us we did great. Alright. Yeah. On the great retirement debate, we believe the best decisions come from hearing both sides of the conversation. Better knowledge leads to better decisions, and better decisions can lead to better outcomes for you and your family. And that's the mission we have here and we're committed to every day. See you on the next episode of The Great Retirement Debate. Retirement debate. Jeffrey Levine is chief planning officer at Focus Partners. This podcast is for informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information mentioned may be based on third party information which may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. 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