ChatGPT: A Clever Companion to Financial Planning?

ChatGPT: A Clever Companion to Financial Planning?


ChatGPT, the artificial intelligence chatbot that everyone is talking about, was released in November 2022 and continues to gain attention as people use it to compose essays, create apps, build resumes, write bedtime stories, ask for advice, and much, much more. Tech experts have called it brilliant, scary, fun, dangerous, and everything in between.

In this space, we will review…

  • What is ChatGPT?
  • How Sharp is ChatGPT’s Financial Planning Acumen?
  • What Gaps Do We See with ChatGPT?

See where the tech met our standards and where it didn’t quite measure up.

What is ChatGPT?

We’re not ChatGPT experts, but before we continue, we want to briefly explain how the platform works. ChatGPT is “a general-purpose chatbot that uses artificial intelligence to generate text after a user enters a prompt.” Similar to a search engine like Google, ChatGPT turns up a reply to a user’s prompt or question within a matter of seconds. But unlike a search engine, the technology generates conversational text to provide users with a direct answer rather than a slew of articles and pages. ChatGPT is available to everyone after creating a free account.   

How Sharp is ChatGPT’s Financial Planning Acumen?

Let’s put ChatGPT to the test. We asked the AI chatbot four questions related to Yeske Buie, financial planning, and investments to see where the tech meets our standards and where it doesn’t quite measure up.

live big
san francisco financial planner
investment growth

What do you know about Yeske Buie?

ChatGPT: Yeske Buie is a fee-only financial planning firm based in San Francisco, California. The firm was founded in 1990 by Dr. Dave Yeske and Elissa Buie, both of whom are Certified Financial Planner (CFP) professionals. Yeske Buie has since grown to become one of the largest fee-only financial planning firms in the Bay Area.

The firm provides comprehensive financial planning services to individuals, families, and businesses, including retirement planning, investment management, tax planning, estate planning, and risk management. Yeske Buie’s approach to financial planning is based on academic research and evidence-based principles, and they use technology to provide clients with real-time access to their financial information.

Yeske Buie has received numerous awards and recognition for their work, including being named as a “Top RIA” by Financial Planning magazine and a “Best Place to Work” by the San Francisco Business Times. The firm has also been featured in various media outlets such as The Wall Street Journal, CNBC, and The New York Times.

Yeske Buie: Hey, not a bad start! One of the aspects of this answer that we like most is the focus on comprehensive financial planning. The reputation that often precedes financial planners is one focused on investments and asset management. While that is certainly a part of what we do, we believe that it’s imperative to focus on the big picture of a client’s financial life.

If we were to identify one key item that’s missing from ChatGPT’s response, it would be our focus on building long-term relationships with clients. We believe that enhancing relationships is at the heart of what matters, because exquisite relationships are the indispensable glue that keeps Yeske Buie humming. Because of this belief, continuously assessing and strengthening every relationship is our cultural imperative – relationships with Clients, strategic partners, peers, the profession, the community, and each other. Regardless of whether our relationship has spanned two months or twenty years, we consider every moment together to be an opportunity to elevate our connection and live fully into our purpose of empowering you to pursue your Live Big® life.

What does it mean to Live Big?

ChatGPT: The phrase “live big” can have different meanings depending on the context and individual interpretation. Generally, living big implies living life to the fullest, enjoying every moment, and pursuing your passions and dreams without holding back.

For some people, living big may mean taking risks, stepping out of their comfort zone, and pursuing their goals with confidence and determination. This could involve starting a business, traveling to new places, or pursuing a creative hobby or passion.

For others, living big may mean focusing on personal growth, building meaningful relationships, and giving back to their community. This could involve volunteering for a cause they care about, spending quality time with loved ones, or practicing self-care and mindfulness.

Ultimately, living big is a personal choice that depends on individual values, beliefs, and goals. It is about embracing life with a positive mindset and being open to new experiences and opportunities, no matter how big or small.

Yeske Buie: We’re gratified to see that this answer skews more towards the Live Big philosophy as opposed to the “live large” philosophy, although the Live Big philosophy goes a little deeper than the chatbot suggests. Live Big is permission to envision and pursue a limitless vision for your life. That vision is uniquely personal and, like ChatGPT said, may mean traveling the world or finding joy in the most mundane places. It’s up to you to define your Live Big life, and we’re here to help make it possible using creative strategies – grounded wisdom®.

What is the most important part of financial planning?

ChatGPT: The most important part of financial planning is setting clear and achievable financial goals. This involves identifying your short-term and long-term financial objectives, such as saving for retirement, buying a house, paying off debt, or starting a business. Once you have established your goals, you can then develop a comprehensive financial plan that outlines the steps you need to take to achieve them. This may include creating a budget, developing an investment strategy, optimizing your taxes, and managing your debt. However, without clear goals in place, it can be difficult to know where to focus your efforts and make progress towards achieving financial security and success.

Yeske Buie: Hmm, this one misses the mark for us. Or perhaps it’s missing a few key words. In addition to the adjectives ‘clear’ and ‘achievable’ financial goals, we’d add personal, relatable, and aligned with who you are and what matters to you.

Our discovery process is all about getting to know you. We endeavor to uncover your greatest hopes and dreams, and we strive to learn about what matters to you most. We often say that the operating instructions for the plan come from inside – your values system, your mind, and your heart. As ChatGPT suggests, with everything we learn from your responses to our exploration together, we can then get to work in creating an initial financial plan that aligns with the core of who you are.

What’s the difference between IRR and TWR?

ChatGPT: IRR (Internal Rate of Return) and TWR (Time-Weighted Return) are both methods used to calculate investment returns, but they differ in how they measure the performance of an investment over a period of time.

IRR is a measure of the profitability of an investment, expressed as a percentage rate. It takes into account the time value of money and considers the present value of future cash flows. IRR calculates the rate of return that makes the net present value of all cash flows equal to zero. IRR is typically used to evaluate the potential profitability of a single investment or project.

TWR, on the other hand, is a method of calculating investment returns that takes into account the timing and amount of cash flows over a given period of time. It is a geometric average of a series of sub-period returns, with each sub-period weighted according to the proportion of assets invested in that period. TWR is often used to evaluate the performance of an investment portfolio over time, as it allows for accurate comparisons between different periods and accounts for the impact of cash flows on investment returns.

In summary, IRR measures the profitability of a single investment or project, while TWR measures the performance of an investment portfolio over time, taking into account the timing and amount of cash flows. Both measures have their own strengths and limitations, and the choice of which to use will depend on the specific needs and goals of the investor or investment manager.

Yeske Buie: Not too bad, but we’re going to simplify this one a bit. The Internal Rate of Return (IRR) is also known as the “Dollar-Weighted” Return and it measures the performance of your portfolio based on how much is invested at any one time. For example, if you had a modest sum invested during the first month and then made a deposit that doubled the size of your account at the beginning of the second month, the second month’s return would carry twice as much weight as the first month’s in the calculation of your overall return. The IRR is more reflective of the actual dollar gains earned in your account.

The Time-Weighted Return (TWR) is calculated as if there was a constant one-dollar investment in your account. In doing so, it ignores the effects of deposits and withdrawals that you may make. Unlike the IRR example above, the TWR would ignore the deposit made at the beginning of month two and give equal weight to the returns earned in each of the two months.

The Internal Rate of Return tells you how well you are personally doing. The Time-Weighted Rate of Return tells you how well the overall investment strategy is doing.

What Gaps Do We See with ChatGPT? 

Overall, ChatGPT did a fair job in answering our questions. It may not have completely hit the mark in some cases, but it also wasn’t completely off base. From a technical standpoint, there are some known gaps with the software including limited knowledge of events after 2021, and accuracy problems and grammatical issues, among others.

As to whether or not ChatGPT is a clever companion for financial planning (a title ChatGPT came up with, by the way!), the list of limitations grows longer. ChatGPT cannot be expected to…

  • Know any potential life changes on your horizon that could impact your financial plan,
  • Gather information on your needs, values, goals, and relationships, and use that information appropriately,
  • Have common sense, communicate empathetically, or understand jokes and sarcasm,
  • Hold you accountable to help you achieve your goals.

As we like to say, financial planning is a process. It is a journey, not an event. We’re here to help you adapt your journey to life’s emerging realities and, ultimately, to help you Live Big. Whether you’re in San Francisco, the Northern Virginia area, or anywhere in the 2,400 miles in between, we’d love to connect with you to assist with all of your financial planning needs.