Jax wealth manager hopeful, skeptical of AI power (Courtesy of First Coast INNO) — Artificial Intelligence and large language models have become the “in” buzzword over the past couple of years — but beyond the buzz, stock prices, investment announces and speculation, the technology is beginning to show real world effects on industries.
To see how AI is affecting wealth management, the Business Journal talked with Jason Hyrne, senior private wealth advisor for Gryphon Wealth.
Although the nascent technology’s impact has been limited so far, Hyrne said he anticipates an eventual revolution.
The following Q&A has been edited for clarity and brevity.
Has AI helped or hindered your wealth management firm?
Outside of the impact to markets and investments related to AI, AI hasn’t yet had a major impact on our firm, positive or negative. In the long run, I expect AI to revolutionize nearly every industry. Wealth management certainly will be one of those. As an optimist, I generally think the changes will be positive, but like any new technology, those that do not adapt and incorporate it will be left behind.
Are you exploring or already using AI to help with training, improve workflows and or automate time-consuming tasks?
Our broker dealer, Wells Fargo Financial Network, is incorporating AI into workflows at a rapid pace. Locally, we are investigating and researching AI, but have not yet incorporated AI into Gryphon Wealth’s workflows or investment management processes. I believe AI will improve dramatically and quickly, but right now it has a lot of room to improve, especially where data is sparse, which it turns out is most places. As the saying goes, the map is not the territory. So even though there is more data now than at any time in history, that data still isn’t an accurate representation of reality. I have heard this issue referred to as Swiss cheese. The data is solid in spots, but completely missing in other spots, like the holes in the cheese. It is difficult to anticipate or plug the holes. The problem is magnified because AI has habit of “hallucinating” or making up an answer when it encounters these gaps in the data or just doesn’t know. In addition, while we would like to think AI is unbiased and logical like the Star Trek characters Data and Dr. Spock, the reality is that AI is susceptible to the biases of the parameters and sources it is trained on. While AI may be ready for the mainstream when it comes to automated tasks and workflows, I am not ready to trust its output for more consequential issues.
How important is AI to the future of wealth management and investing?
AI likely will have a major impact on wealth management and investing. Like most technologies of the past, it certainly is going to make the adopters of AI more efficient and productive. With that said, I am skeptical AI will replace humans in the fields of investing and wealth management. Wealth management isn’t just numbers and formulas, it is about people, trust and personal relationships. Even in the case of investing, which at first glance would seem to be an easier problem for AI to solve, AI still will be used best in combination with humans in my opinion. Ian Wilson, the former GE executive, reportedly said, “No amount of sophistication is going to allay the fact that all of your knowledge is about the past and all your decisions are about the future.” AI can be trained only on past data. Yet its inference is about the future and, perhaps just as important, how humans will behave in the future. So I think the best investors in the future will augment their work using AI, but not outsource the decision to AI. I make these predictions with a great deal of humility, though. As it turns out, all my information is about the past, too. We will just have to see how the future unfolds and do the best we can every step of the way.