Can ChatGPT Plan Your Retirement?: Generative AI and Financial Advice

47 Pages Posted: 19 Feb 2024 Last revised: 1 May 2024

See all articles by Andrew W. Lo

Andrew W. Lo

Massachusetts Institute of Technology (MIT) - Laboratory for Financial Engineering

Jillian Ross

MIT CSAIL

Date Written: February 11, 2024

Abstract

We identify some of the most pressing issues facing the adoption of large language models (LLMs) in practical settings, and propose a research agenda to reach the next technological inflection point in generative AI. We focus on four challenges facing most LLM applications: domain-specific expertise, an ability to tailor that expertise to a user’s unique situation, trustworthiness and adherence to the user’s moral and ethical standards, and conformity to regulatory guidelines and oversight. These challenges apply to virtually all industries and endeavors in which LLMs can be applied, such as medicine, law, accounting, education, psychotherapy, marketing, and corporate strategy. For concreteness, we focus on the narrow context of financial advice, which serves as an ideal test bed both for determining the possible shortcomings of current LLMs, and for exploring ways to overcome them. Our goal is not to provide solutions to these challenges—which will likely take years to develop—but to propose a framework and road map for solving them as part of a larger research agenda for improving generative AI in any application.

Keywords: Financial Advisors; Robo Advisors; Financial Technology; Generative AI; Large Language Models; ChatGPT

JEL Classification: C10, C20, G11, G12

Suggested Citation

Lo, Andrew W. and Ross, Jillian, Can ChatGPT Plan Your Retirement?: Generative AI and Financial Advice (February 11, 2024). Available at SSRN: https://ssrn.com/abstract=4722780 or http://dx.doi.org/10.2139/ssrn.4722780

Andrew W. Lo (Contact Author)

Massachusetts Institute of Technology (MIT) - Laboratory for Financial Engineering ( email )

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Jillian Ross

MIT CSAIL ( email )

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