Steve Manning, co-founder of Finchat and chief executive of smfp (Self-managed financial planning), said the future of financial advice will be influenced as significantly by regulatory changes as it will be by the emergence of new technologies.
With this in mind, he began to investigate how he could craft the already available technology into a more convenient tool, giving birth to FinChat, which became the industry’s pioneer in voice-based financial planning digital assistants.
“I had developed a financial literacy module with about 40 different financial planning calculators,” he said.
“I thought I could try and work this into a form that would operate through Amazon’s Alexa. I already had the calculators and code (in JavaScript) with help from my son, Andrew, who is a very good coder.
“We started using Alexa to test it, and Amazon was very supportive. I was a little surprised when Amazon contacted me – pleasantly surprised.
“The tool has now been certified by Amazon and included in its catalogue of skills.”
In just 12 months, Finchat has become a reality, offering an AI-powered chatbot designed specifically for the financial planning industry.
It enables users to ask questions about financial planning using voice only and generates answers to queries using reasoning and a database that is constantly updated to ensure accuracy.
“We then took this module and started SMFP to provide a financial planning resource for SMSF members who prefer to take control of their own financial destiny,” Mr Manning said.
“In SMSF, there is a DIY mentality, but members do need tools, and that is what SMFP can provide. Users can also send a query if they need help and escalate this to full advice if they want to. The decision is theirs.”
Mr Manning explained that he had been an early user of ChatGPT but added that, although it does a reasonable job of providing information, it does fail in certain critical areas.
“For example, I asked a simple question such as ‘I have $300,000 in my SMSF fund, a salary of $120,000 a year and contribute only SG contributions. I plan to retire in 10 years and will need $60,000 a year in retirement. How long will my funds last?’” he said
“It came up with a good answer, but it was using old rates, and it didn’t apply compound interest to contributions, so the methodology was off. That can put people off trusting it.
“With smfp, we control all aspects. We put in the latest data, and although it appears to be AI, it is on rails – it’s not allowed to go off the rails.”
Mr Manning assured that smfp remains diligently updated to adapt to the evolving legislative landscape.
For SMSF members, Mr Manning said smfp can help users establish how much they should be contributing to their fund in preparation for the retirement lifestyle they desire.
“It can also help establish how much life insurance is needed, test estate planning, and check your budget to see where you’re spending your money and if you’re spending too much in certain areas,” he said
Although smfp started off as a tool for the “ordinary household”, Mr Manning saw that it had potential as a support for the SMSF sector.
“Many SMSF members prefer to do [financial planning] themselves with a little help rather than give everything to a financial adviser,” he said.
“People are curious [about smfp]. Some financial advisers see it as the way of the future – a hybrid system.”
