Financial Insights

“Open The Pod Bay Doors HAL”

Having grown up with the fiction novel “2001: A Space Odyssey” by Arthur C. Clarke and watching the 1968 Stanley Kubrick classic film, I have always been looking over my shoulder thinking that HAL 9000 the advanced artificial intelligence designed to assist the fictitious space craft Discovery One would at some point be in charge.

For those of you not familiar with “2001: Space Odyssey”, HAL 9000 the mission’s Artificial Intelligence (A.I.) becomes paranoid and develops a fear that the mission’s objectives are being jeopardized by the crew members, who are planning to disconnect HAL due to its erratic behavior.

HAL decides to take matters into its own hands and attempts to eliminate the human crew.  When astronaut Dave Bowman requests HAL to open the pod bay doors after leaving the main space craft, HAL, aware of the crew’s intentions, deliberately refuses the command.  This classic standoff between A.I. and humanity was a prelude to what is now evolving right before us.

Will Artificial Intelligence replace many of our jobs?  When perfect advice is just a keystroke away what will become of the advice givers?  I decided that the best place to get this answer would be to ask Chat GPT one of the recent A.I. platforms that have people reeling.

Selfishly concerned about the advice I provide, I asked Chat GPT, “When is perfect financial advice not right for all?”

I was answered within seconds.

The notion of “perfect advice” implies that there is a single, universally applicable solution or course of action that will work optimally for every situation and individual. However, the reality is that people are unique, and their circumstances and perspectives differ greatly. As a result, what may be considered perfect advice for one person or situation may not be appropriate or effective for another.

Feeling a bit better that I may still be relevant to my clients I pushed on and asked for some examples of why perfect financial advice might not be so perfect:

  1. Contextual Differences: Advice must consider the specific context, including factors such as cultural norms, personal values, and individual circumstances.
  2. Varying Goals and Objectives: People have different goals and aspirations, and what may be the perfect advice for achieving one person’s objectives may not align with someone else’s.

Remembering what HAL did to astronaut Dave, I was convinced that Chat GPT was just being a bit sneaky.  I’m smart enough to know that A.I. has the capacity to ask probing questions to zero in on the differences of objectives and goals. My job security might not be as secure as initially thought.  But being the smart aleck that A.I. is Chat GPT couldn’t stop there and provided me with four additional reasons why perfect financial advice might need a human touch.

  1. Emotional and Psychological Factors: Individuals differ in terms of their emotional makeup, coping mechanisms, and mental states. The perfect advice should consider these factors and address the emotional well-being of the person seeking guidance.
  2. Complexity and Uncertainty: Life is complex, and situations often involve numerous interconnected variables and uncertainties. The perfect advice might oversimplify a complex issue or fail to account for unpredictable factors that could influence the outcome.
  3. Evolution and Change: Circumstances change over time, and what might have been considered perfect advice in the past may not hold true in the present or the future. Advice needs to adapt to changing circumstances and evolving perspectives.

Change, uncertainty and our emotions deserve a human conversation.  Not the perfect A.I. answer.  Investing and wealth management is not black and white.  I have been in many meetings where the perfect answer or action was not taken (initially).  The complexity or emotional uncertainly might have had the client not ready to go down that path just yet.  The perfect answer or action sometimes needs to be massaged, delayed or looked at from a different data point or later date in order to increase the possibility of a client’s success.

In “2001: Space Odyssey”, without emotion, HAL 9000 determined that the conflict between its programming and its mission objectives was reason enough to let the crew float aimlessly in space.  Keeping the pod bay doors shut would save the mission.  The only problem was that there would be no humans left to enjoy the success.

The financial industry will build A.I. with perfect answers but it will always take imperfect, caring financial professionals to discuss, guide and reason what might be best for their clients.

The foregoing content reflects the opinions of Advisors Capital Management, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.


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