Wall Street weighs pros and cons of AI as Washington gets to work

Washington is sprinting to keep pace with the AI revolution. So where does that leave Wall Street?

Adobe, IBM, Nvidia and a handful more technology companies signed President Joe Biden’s voluntary commitments governing artificial intelligence this week. The document requires steps such as watermarking AI-generated content and other assurances aimed at limiting AI to positive purposes, as opposed to nefarious ones.

AI industry juggernauts Google, OpenAI and OpenAI partner Microsoft signed onto the original set of commitments in July. The other five companies signing on to the commitments this week were Palantir, Stability, Salesforce, Scale and Cohere.

The White House’s maneuver is a step forward in legislating the growth of AI and its purveyors. All the President’s men and women apparently felt the need to make some kind of move, even a barely binding one. Meanwhile, a Senate subcommittee is meeting this week to discuss the dangers involving the lack of AI transparency, even as it struggles to pass any sort of practical AI legislation.

So with no real laws on the books to guide them and a new technological transformation in the air, what is the wealth management industry doing to maximize the positives of AI, while protecting clients from its potentially destructive purposes?


According to most wealth advisors, AI is best used for marketing and organizational tasks in its current configuration. Sure there are so-called Quant traders out there using advanced algorithms to pick stocks and move markets, but for the majority of wealth managers AI is more about writing letters than crunching numbers at this juncture.

Michael Whitman, financial planner at Millennium Planning Group, for example, says the biggest thing that AI is doing for him right now is drafting emails and helping organize his notes.

“I have definitely saved hours of time by using AI though for organizing thoughts and client facing action items of the firm, goals for the client, observations from the meeting, recommendations, and client to-dos,” said Whitman.

Along similar marketing and organizational lines, Nicholas Bunio, certified financial planner with Retirement Wealth Advisors, uses ChatGPT as a time-saving device to make posts.

“I like it since it helps to save some time, but right now, ChatGPT is very limited,” said Bunio. “So I wordsmith and make changes to what ChatGPT writes. AI is only as good as its programming and knowledge base.”

Finally, Matt Chancey, certified financial planner with Micel Financial, believes that over the long-term AI will bring down the cost of investing just like ETFs did by putting pressure on mutual fund fees. In the meantime, however, he sees it being used more by bloggers and content providers.


Because the financial services industry is so highly regulated, Chancey sees it as being in better shape than most others when it comes defending itself against AI threats. Furthermore, he doubts the highly recognizable companies signing the President’s declaration or meeting with Congress will be the ones to knowingly use AI for nefarious purposes.  

That said, he is wary of less ethical operators, working in the dark and gray areas of finance.

“There is plenty of money to be made in financial securities arena by doing things the right way, with ethics and morals, but there are always corner cutters out there. I would hope that regulation would stop this, but that is a big ask because by the time the regulators know what’s going on the damage could already be done,” said Chancey.

Millennium’s Whitman echoes Chancey’s belief that “bad eggs will always find a way to do something bad.” However, he also believes that good old-fashioned human interaction will always be a solid defense against the misuse of new technologies including AI.

“AI will never be able to sit across from a client and see how they react to risk or certain options to achieving their goals,” said Whitman.

Not that people have never been ripped off by unscrupulous advisors and brokers in face-to-face meetings, of course. But Bunio fears AI could take it to a whole new level.

“I’m not 100% sure how AI could do this, but my imagination would be that a company or person purposely uses AI to give out bad advice, steal money or buy high fee investments. It’s AI setup on purpose to do harm,” said Bunio.

Added Bunio: “As for how this can be stopped, I’m no IT expert. But having standards, laws, disclosures and regulator checks are a way to prevent trouble. Then again, nothing is infallible. Our laws and regulators couldn’t prevent 2008, SVB Bank and even the depression. We are in a new world that’s only just got started.”

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