How AI May Be Transforming Financial Decisions
Spring Updates - The flowers are just around the corner!!
We are on the cusp of spring, and with spring comes new updates. We have brought on Curtis Kawasaki, CPA, CFP® to share his expertise and assist our financial planning team as we are broadening capabilities. I’ve known him over 35 years and am excited he has joined us. Welcome Curtis.
In 2024 I agreed to be Editor-In-Chief of the Oregon State Bar Estate Planning Newsletter. I was asked to assist using my leadership skills to restructure organization and format. Thankfully I was surrounded by other capable editors to aid with the hands-on editing portion. Over this past year we developed an efficient and sustainable process. A massive thank you to the Oregon State Bar and the lawyers that jumped in with me to keep it going. Check out a few of the recent editions here.
AI - An Oasis or a Cool Drink of Water
Now onto the omnipresent topic of the year so far. No, not the daily political headlines, I’m talking about AI. Most of you know about Maslow’s Hierarchy of Needs – which explains human motivation in five levels of needs: starting with basic needs at the base and the self-fulfillment needs at the top. Just as Maslow’s Hierarchy pyramid illustrates what drives human decision making, the Data-Information-Knowledge-Wisdom pyramid shows how data evolves to information and actionable insights. AI, like human intelligence, depends on structured data to produce meaningful outcomes.
At Allen Trust Company we provide four services: Investment Management, Tax Preparation, Financial Planning, and Trust Administration. Not unlike AI, our company requires data from our clients or potential clients to be able to find solutions and achieve goals. Given that AI needs data to function, you may assume that simply providing that data to the program can produce a reliable plan for any situation. Think again…
Do it yourself? Garbage IN-Garbage OUT
While AI can process data and generate financial insights, it lacks the ability to interpret nuances, legal consequences, and individual needs. While AI – or specific websites - can draft a will or trust, for example, the programs cannot guarantee alignment with financial goals, compliance with legal standards, and true understanding of family dynamics.
This is not to say that AI is not a great tool to help organize data. It can easily provide questions that may be helpful to ask a professional when the time comes. In a rules-based discipline like financial planning, there are answers that can be searched. However, if you have ever used AI for complex topics, you know that simply providing input/parameters will not provide you with a definitive answer. AI is only as good as the data it receives, and without expert guidance, its outputs may be unreliable.
In the world of personal finance, understanding the human connection is crucial. There is no one way to live. Life itself is a balance between the objective and the subjective. Financial planning involves complexities relating to a client and their desired outcome as well as the communication of their needs (Maslow’s Hierarchy). There are not one-size-fits-all templates when designing a plan for a client’s legacy. Data alone cannot be used to produce a plan. Information, Knowledge, and Wisdom are key additional factors when providing guidance tailored to each client’s needs in a financial plan.
Conclusion - Now what!!
Working with professionals cannot be replaced by AI as every client’s situation is unique - requiring professional judgment, experience, and adaptability.
Our team is here to help. Call us at 503-292-1041 or email info@allentrust.com if you would like to discuss your financial situation.