WEBVTT - My guest today is an AI bot 0:00:09.600 --> 0:00:12.879 Hello and welcome to The Australian's Money Puzzle podcast. I'm 0:00:12.960 --> 0:00:17.639 James Kirby. Welcome aboard everybody. It looks very much like 0:00:17.760 --> 0:00:20.960 twenty twenty five is shaping up as the year artificial 0:00:21.040 --> 0:00:25.720 intelligence really changes the game for investors. And in today's show, 0:00:25.840 --> 0:00:30.240 I've got two guests. I've got financial advisor James Gerard, 0:00:30.280 --> 0:00:34.400 who you know, and an AI chatbot in the form 0:00:34.560 --> 0:00:38.720 of Microsoft's co Pilot. Now, in each segment of the show, 0:00:39.120 --> 0:00:43.920 I start by interviewing the AI copilot, and then my 0:00:44.159 --> 0:00:48.879 very human financial advisor guest, James Girard, reviews the quality 0:00:48.960 --> 0:00:52.720 basically of what's been offered for free by this remarkable 0:00:52.800 --> 0:01:00.680 new technology. Okay, stand by, here we go. Thank you for. 0:01:00.640 --> 0:01:02.920 Coming on, Thanks for having me, James. 0:01:03.520 --> 0:01:05.319 Okay, let's get into it. I really just want to 0:01:05.319 --> 0:01:07.280 figure out how to start. You know, how do I 0:01:07.319 --> 0:01:10.800 begin as an investor? Is there certain books or very 0:01:10.800 --> 0:01:12.800 well known courses perhaps I could. 0:01:12.640 --> 0:01:15.840 Do starting out as an investor? You want to look 0:01:15.840 --> 0:01:19.600 at the basics first. There's a classic book called The 0:01:19.680 --> 0:01:23.840 Intelligent Investor by Benjamin Graham that's really useful, and you 0:01:23.880 --> 0:01:27.200 can find online courses too. It's about getting a good 0:01:27.200 --> 0:01:30.160 grasp on the fundamentals before diving into the market. 0:01:31.319 --> 0:01:33.240 Yeah, thank you. Okay, Well, the thing is, I looked 0:01:33.240 --> 0:01:35.640 at the Benjamin Graham books and they written a long 0:01:35.680 --> 0:01:38.440 time ago. I mean, I find that those books very difficult, 0:01:38.480 --> 0:01:40.759 that they're beyond me. Really, I'm looking for something much 0:01:40.800 --> 0:01:44.440 more elementary, you know, like a introduction perhaps to personal investing. 0:01:45.000 --> 0:01:48.480 Got it. The older stuff can be a bit dense. 0:01:48.880 --> 0:01:51.760 For something more digestible, you might check out A Random 0:01:51.800 --> 0:01:55.400 Walk down Wall Street by Burton Malkiel. It's a bit 0:01:55.400 --> 0:01:59.080 more approachable for beginners and talks about the basics of 0:01:59.160 --> 0:02:01.120 investing in the stock market. 0:02:02.600 --> 0:02:05.000 Yeah, very good. I like that idea. I know that 0:02:05.200 --> 0:02:08.120 basics of the stock market that would be useful. One 0:02:08.160 --> 0:02:10.720 of the things I think that's happened since was it 0:02:10.760 --> 0:02:13.919 Burton Malkiel wrote that book? Of course, it's again it's 0:02:13.919 --> 0:02:15.960 a long time ago, and it's a bit dense, you know, Like, 0:02:16.160 --> 0:02:18.200 which is better? Can you tell me? The shares or 0:02:18.240 --> 0:02:18.919 the ETFs. 0:02:20.080 --> 0:02:24.200 ETFs have really changed the game. They offer diversification and 0:02:24.240 --> 0:02:27.720 tend to have lower fees compared to buying individual shares. 0:02:28.440 --> 0:02:31.320 It's not necessarily about one being better than the other. 0:02:31.360 --> 0:02:34.359 It depends on your strategy. ETFs can be a good 0:02:34.400 --> 0:02:37.160 starting point for beginners because of the built in diversification. 0:02:38.240 --> 0:02:39.600 What's your goal with investing? 0:02:40.480 --> 0:02:43.880 My goal? Look, my goal with investing is like any 0:02:43.880 --> 0:02:46.359 other goal, which is to make as much money as possible. 0:02:46.639 --> 0:02:48.840 I suppose one of the things that sort of is 0:02:48.840 --> 0:02:51.960 a dilemma for me is whether I buy shares or 0:02:52.240 --> 0:02:55.520 exchange traded funds. As you say, maybe they're interchangeable, but 0:02:56.120 --> 0:02:59.560 which do you think? Whether I should buy shares or property? 0:02:59.600 --> 0:03:01.960 Because house price is also going up pretty. 0:03:01.680 --> 0:03:05.400 Fast, Property can be a solid investment, especially if you're 0:03:05.400 --> 0:03:09.399 thinking long term. It's a tangible asset and has potential 0:03:09.440 --> 0:03:14.560 for appreciation and rental income. Shares and ETFs are more liquid, 0:03:14.960 --> 0:03:19.800 but property offers a different kind of stability. Diversifying across 0:03:19.840 --> 0:03:24.359 asset classes could balance out your portfolio. What's your risk tolerance? 0:03:24.520 --> 0:03:29.320 Like my risk tolerance? My risk tolerance is normal. I 0:03:29.360 --> 0:03:32.040 suppose One of the things I'm wondering is though, if 0:03:32.080 --> 0:03:34.239 I'm paying down my home loan right at the moment, 0:03:34.320 --> 0:03:37.040 my mortgage, maybe I'd be better off doing some investing. 0:03:37.600 --> 0:03:40.000 Is there any sort of surveys that suggests which is 0:03:40.080 --> 0:03:42.640 better and keep in mind I live in Australia. 0:03:43.760 --> 0:03:47.520 It really depends on your specific situation. Paying down your 0:03:47.560 --> 0:03:50.360 mortgage can be a safe bet because it reduces debt 0:03:50.480 --> 0:03:54.600 and can save you on interest. Investing could potentially offer 0:03:54.680 --> 0:03:58.960 higher returns, but it comes with risks. Consider speaking with 0:03:59.000 --> 0:04:01.680 a financial advisor who knows the Australian market. 0:04:01.680 --> 0:04:04.520 Well, okay, yes, well. One of the things I'm hoping 0:04:04.520 --> 0:04:06.880 to get ASPUS is, you know, without going to an advisor, 0:04:06.960 --> 0:04:09.360 maybe gets some information from you because you seem to 0:04:09.360 --> 0:04:12.280 be across investment data. One of the things we have 0:04:12.400 --> 0:04:16.480 here is this choice between putting money aside for the pension, 0:04:17.120 --> 0:04:19.800 you know, for later life, or putting money into mortgage. 0:04:20.279 --> 0:04:22.919 It's difficult to assess how much do you need in 0:04:22.960 --> 0:04:25.400 this area? How much do you need to retire? How 0:04:25.440 --> 0:04:26.800 do you estimate these things? 0:04:27.400 --> 0:04:31.400 Retirement needs can vary greatly. A common rule of thumb 0:04:31.480 --> 0:04:34.120 is aiming for around seventy to eighty percent of your 0:04:34.120 --> 0:04:38.000 current income annually in retirement. This includes your pension savings 0:04:38.040 --> 0:04:41.159 and any investments, but it really depends on your lifestyle, 0:04:41.320 --> 0:04:45.000 health care needs, and life expectancy. It's a balancing act. 0:04:45.960 --> 0:04:48.080 Oh yeah, where did you get that number? For the 0:04:48.120 --> 0:04:50.200 rule of thumb, the seventy to eighty percent. It sounds 0:04:50.240 --> 0:04:52.640 has high to me. I'd love to have that level, 0:04:52.760 --> 0:04:54.560 you know, of income in my own retirement. 0:04:55.080 --> 0:04:59.440 The seventy to eighty percent figure comes from financial planning guidelines. 0:05:00.200 --> 0:05:04.040 It's based on the idea that retirees might spend less 0:05:04.120 --> 0:05:07.599 on things like commuting or saving for retirement, but it 0:05:07.640 --> 0:05:11.839 can vary. Some folks aim for more, especially if they 0:05:11.880 --> 0:05:13.839 plan to travel or have high medical costs. 0:05:14.440 --> 0:05:18.000 Okay, okay, and what would you say financial planning guidelines? 0:05:18.880 --> 0:05:20.640 What which guidelines are you referring to? 0:05:21.120 --> 0:05:24.240 I'm talking about advice from financial planners and experts. 0:05:24.720 --> 0:05:27.839 Can you name who the financial planners are? I mean, like, 0:05:27.960 --> 0:05:30.960 is it an association some sort? Is there a qualification here? 0:05:31.560 --> 0:05:35.560 Sure? These guidelines often come from financial planning associations and 0:05:35.680 --> 0:05:40.600 experts worldwide. In Australia, you've got bodies like the Financial 0:05:40.680 --> 0:05:48.560 Planning Association FPA or the Association of Financial Advisors AFA. 0:05:48.720 --> 0:05:53.000 Financial planners typically need qualifications and must meet certain standards 0:05:53.000 --> 0:05:53.719 to give advice. 0:05:54.320 --> 0:05:56.960 Do you know how many financial advices there are in Australia. 0:05:57.080 --> 0:05:58.800 I'd like to find one. 0:05:59.120 --> 0:06:02.400 There are thousands of financial advisors. I am not sure 0:06:02.440 --> 0:06:05.560 of the exact number, but finding one might be easier 0:06:05.600 --> 0:06:09.599 through the Financial Planning Association or the Australian Securities and 0:06:09.680 --> 0:06:11.360 Investments Commission website. 0:06:11.720 --> 0:06:16.640 Okay, pretty so, thank you well, James Gerard, human financial advisor. 0:06:16.920 --> 0:06:19.800 That was pretty spooky. I found it spooky because I'd 0:06:19.839 --> 0:06:23.200 been talking at that point to the bot for this 0:06:23.279 --> 0:06:25.440 is edited versions you're hearing, folks, I'd been talking to 0:06:25.480 --> 0:06:27.640 it for about half an hour and I was starting 0:06:28.279 --> 0:06:31.120 It never gets emotional, of course, but you know, I 0:06:31.320 --> 0:06:34.880 was starting to respond like I was talking to a character. 0:06:35.200 --> 0:06:37.440 First thing I think we have to put on the 0:06:37.480 --> 0:06:39.680 table is it's probably right. I mean, a lot of 0:06:39.720 --> 0:06:42.080 the elementary financial advice, Why on earth would you pay 0:06:42.120 --> 0:06:44.720 three thousand a year to get basic questions answered when 0:06:44.720 --> 0:06:48.120 you can get them answered with AI. Am I being 0:06:48.200 --> 0:06:54.839 brutally simplistic or is that true? I think it's true, James. 0:06:55.520 --> 0:06:58.400 People will be jumping onto AI more and more to 0:06:58.520 --> 0:07:01.600 typing these basic questions, and that's a threat to all 0:07:01.640 --> 0:07:05.680 financial advisors where they're just focusing on the basics. So 0:07:05.720 --> 0:07:07.799 I think what's going to happen with the financial advisory 0:07:07.800 --> 0:07:10.600 industry is that everybody will need to skill up and 0:07:10.840 --> 0:07:14.440 level up. So where there's very complex situation, not even 0:07:14.560 --> 0:07:17.480 complex situations, complex decisions to be made, where there's maybe 0:07:17.800 --> 0:07:21.440 five to ten different potential pathways where someone could go 0:07:21.520 --> 0:07:24.880 with an investment or the way they structure something, it's 0:07:24.960 --> 0:07:28.440 very difficult to capture that in a very full discussion 0:07:28.520 --> 0:07:33.040 and overlay that judgment, that human judgment, because AI is 0:07:33.080 --> 0:07:35.960 taking data, it's listening to the import it's whacking out 0:07:36.200 --> 0:07:38.920 what it thinks is best. But it does lack that 0:07:39.800 --> 0:07:41.800 human element and I'm not sure if that can ever 0:07:41.840 --> 0:07:45.120 be replicated because we have to take it to another degree. 0:07:45.240 --> 0:07:48.200 Where As we sit in video calls or face to 0:07:48.240 --> 0:07:51.840 face meetings with clients, us as human financial advisors, we 0:07:51.880 --> 0:07:54.960 look at people's body language, how they react, and we 0:07:55.480 --> 0:07:59.560 position our communication in a way that is in line 0:07:59.600 --> 0:08:01.360 with how the person would like to receive it. So 0:08:01.800 --> 0:08:05.080 some people in our stereotype engineers they love information, whereas 0:08:05.400 --> 0:08:09.200 salespeople in directors they just want short, snappy answers. So 0:08:09.240 --> 0:08:12.280 that's a very simple example of how we adapt in AI. 0:08:12.400 --> 0:08:13.120 Can't see you. 0:08:13.080 --> 0:08:16.440 That's EQ right, that's EQ yeah, IQ. It's never going 0:08:16.480 --> 0:08:19.640 to have the EQ yeah. That's an interesting point. And yeah, 0:08:19.640 --> 0:08:21.600 there's one other thing which you mentioned. I think it's 0:08:21.640 --> 0:08:23.600 the it's the killer point. Really, you have to know 0:08:23.680 --> 0:08:28.440 the question to ask. And in a very almost paradoxical way, 0:08:29.040 --> 0:08:34.480 part of this amazing leap in information supply from AI, 0:08:35.920 --> 0:08:39.520 it means that knowing the questions to ask is more 0:08:39.520 --> 0:08:42.400 important than ever. So you would think financial literacy is 0:08:42.480 --> 0:08:45.440 less important, but in a way it's more important because 0:08:45.480 --> 0:08:48.040 the people who can harness this other people who will 0:08:48.040 --> 0:08:49.760 ask the right questions. But you're never going to know 0:08:49.840 --> 0:08:54.240 the right questions unless you have some basics I think, 0:08:54.880 --> 0:08:58.959 and then you think in terms of your industry. Basically 0:08:59.000 --> 0:09:02.600 the whole thing moves up. Mar is that the ultimate 0:09:02.640 --> 0:09:03.240 I'll come here. 0:09:03.559 --> 0:09:04.520 Yeah, I believe. 0:09:04.559 --> 0:09:08.000 So. I bet my last dollar that there's financial advisors 0:09:08.040 --> 0:09:10.680 out there today who are typing in basic questions into 0:09:11.040 --> 0:09:14.040 eye engines like what's the current contribution cap, what's catch 0:09:14.120 --> 0:09:17.360 up concessional? So financial advisors are doing it every day. 0:09:17.440 --> 0:09:19.320 Moms and dads and people general public are going to 0:09:19.320 --> 0:09:21.720 do it as well. So the financial advisors need to 0:09:21.760 --> 0:09:23.760 scale up. And one little AI tip would be that 0:09:24.280 --> 0:09:27.120 if you don't know what questions to ask, or you 0:09:27.120 --> 0:09:29.280 think there may be things that you're not completely aware of. 0:09:29.320 --> 0:09:31.880 You can actually ask AI say all right, well, this 0:09:32.000 --> 0:09:34.600 is my situation. I want to know this, but I'm 0:09:34.640 --> 0:09:36.360 not sure what questions to ask. Can you help me 0:09:36.400 --> 0:09:38.680 promptly ask? Tell me what questions I should be asking. 0:09:39.000 --> 0:09:41.240 All right, we're going to keep these segments short. There's 0:09:41.360 --> 0:09:43.200 a lot to get through. So what we're going to 0:09:43.240 --> 0:09:44.920 do in the next segment you'll hear in a moment. 0:09:58.760 --> 0:10:02.000 Hello and welcome back to The Australian's Money Puzzle podcast. 0:10:02.040 --> 0:10:06.040 I'm James Kirby, and my guest today is the Microsoft 0:10:06.120 --> 0:10:10.920 co Pilot AI chatbot. We've been going fairly well so far. 0:10:10.960 --> 0:10:13.000 I want to lift it a gear now and I 0:10:13.040 --> 0:10:16.440 want to ask the co pilot a bit more elaborate, 0:10:16.480 --> 0:10:21.760 bit more advanced questions about Super. For instance, So, okay, 0:10:22.040 --> 0:10:26.400 can you tell me about Super in Australia. I live 0:10:26.400 --> 0:10:29.440 in Australia. How much can I put into Super? Do 0:10:29.480 --> 0:10:29.680 you know? 0:10:29.840 --> 0:10:34.160 Each year for the twenty twenty three to twenty twenty 0:10:34.200 --> 0:10:38.400 four financial year you can contribute up to twenty seven thousand, 0:10:38.520 --> 0:10:42.199 five hundred dollars in concessional before tax contributions. 0:10:42.600 --> 0:10:45.240 Uh huh, very good. Okay, that's really all I'm interested in. 0:10:45.280 --> 0:10:47.880 Twenty seven five hundred. Now, we'll take it, right, we'll 0:10:47.880 --> 0:10:49.439 take it on board. That's actually a bit out of 0:10:49.520 --> 0:10:52.199 date because in fact it's gone up to thirty thousand 0:10:52.200 --> 0:10:54.720 more recently. But still, Now, when I put the money 0:10:54.720 --> 0:10:58.120 into SUPER, what happens? Is it tax free? Does it mean? 0:10:58.800 --> 0:11:00.880 Does it go straight in? Or is or tax involved? 0:11:02.160 --> 0:11:05.400 When you put your before tax contributions into Super, like 0:11:05.480 --> 0:11:10.760 salary sacrifice, they're generally taxed at fifteen percent, So it's 0:11:10.800 --> 0:11:13.840 not tax free, but it's a lower tax rate compared 0:11:13.880 --> 0:11:15.600 to most people's income tax rate. 0:11:16.000 --> 0:11:18.720 I understand. Okay, yeah, very useful. And in terms of 0:11:18.720 --> 0:11:22.280 how much I can put into Super, there's a certain 0:11:22.320 --> 0:11:24.320 amount that goes in by low, right, that I must 0:11:24.400 --> 0:11:26.880 put in. The government makes me put in a certain amount. 0:11:26.920 --> 0:11:28.760 How much is that? Yep? 0:11:28.800 --> 0:11:31.880 There's a compulsory amount. For the twenty twenty three to 0:11:31.960 --> 0:11:36.680 twenty twenty four financial year, employers must contribute at least 0:11:36.720 --> 0:11:40.120 eleven percent of your earnings to your super. This is 0:11:40.160 --> 0:11:42.120 called the superannuation guarantee. 0:11:42.440 --> 0:11:46.480 Okay, right, very good superannuation guarantee. That's the minimum as 0:11:46.520 --> 0:11:49.719 such that I must put into my Super Okay, can 0:11:49.760 --> 0:11:52.840 I take It's my money right? So can I take 0:11:53.040 --> 0:11:55.120 money out of SUPER before I retire? 0:11:56.480 --> 0:12:01.079 Generally, accessing SUPER before retirement is an allowed unless underspecific 0:12:01.080 --> 0:12:06.400 conditions like severe financial hardship or certain medical situations. Once 0:12:06.440 --> 0:12:09.640 you hit the preservation age, you can typically access it. 0:12:10.840 --> 0:12:14.120 The preservation age. What's the preservation age? What does that mean? 0:12:14.640 --> 0:12:18.240 Your preservation age is the minimum age you can generally 0:12:18.360 --> 0:12:22.440 access your Super. In Australia, it ranges from fifty five 0:12:22.520 --> 0:12:24.720 to sixty depending on when you were born. 0:12:25.240 --> 0:12:27.920 Uh huh, okay, okay. Now can I ask you there's 0:12:27.960 --> 0:12:31.520 some changes going on in super where it once if 0:12:31.559 --> 0:12:34.400 you had basically this new tax is coming in on 0:12:34.480 --> 0:12:38.280 Super over three million. I thought Super was tax free. 0:12:38.320 --> 0:12:40.320 I thought all income in Super was tax free. 0:12:40.600 --> 0:12:44.720 Super income is generally taxed lower than regular income, but 0:12:44.800 --> 0:12:48.280 it's not always tax free. From July twenty twenty five, 0:12:49.040 --> 0:12:51.960 over three million dollars will face higher tax rates on 0:12:52.000 --> 0:12:56.160 the earnings. The idea is to ensure fairness in the system. 0:12:56.640 --> 0:12:59.840 It might not affect everyone, but it's worth being aware 0:13:00.040 --> 0:13:04.360 and seeking advice. If your balance is approaching that level, and. 0:13:04.480 --> 0:13:06.760 Is that the low? Now? Is that actually the low. 0:13:07.559 --> 0:13:10.640 Yes, it's set to become law starting in the financial 0:13:10.679 --> 0:13:12.880 year twenty twenty five twenty six. 0:13:13.440 --> 0:13:17.760 Thank you very much. Okay, James Gerard, the human financial 0:13:17.800 --> 0:13:21.040 advisor you were listening to that. I think it's amazing 0:13:21.120 --> 0:13:25.920 that a US based app AIP could give us such 0:13:26.080 --> 0:13:29.440 precise answers. This is the sort of thing that people 0:13:29.440 --> 0:13:32.000 ask financial advisors at an elementary level when they go 0:13:32.040 --> 0:13:33.480 in how much can I put in super? How much 0:13:33.520 --> 0:13:35.560 can I put in pre tax, et cetera post text? 0:13:36.120 --> 0:13:38.040 What did you think of the answers? 0:13:39.400 --> 0:13:42.760 I thought it was very interesting. The answers were mainly 0:13:42.840 --> 0:13:47.880 technically correct. So when it talked about contribution, CAPS gave 0:13:48.240 --> 0:13:51.400 a form of financial year's number. So currently it's thirty 0:13:51.440 --> 0:13:53.720 thousand dollars for pre tax super contribution. 0:13:54.800 --> 0:13:57.240 So it was wrong, Okay, I spotted that. Obviously I 0:13:57.240 --> 0:13:59.079 didn't want to get into an argument with a bot 0:13:59.160 --> 0:14:03.679 on air, but it was as such, it was wrong. 0:14:04.280 --> 0:14:08.520 But then, to be fair, it was not so much 0:14:08.600 --> 0:14:12.080 wrong as out of date. It was right a couple 0:14:12.160 --> 0:14:14.280 of years ago, but it was wrong right now. So 0:14:14.920 --> 0:14:15.880 why is that you think? 0:14:17.200 --> 0:14:20.480 I think it's just the underlying data that's been sucked 0:14:20.520 --> 0:14:24.000 into these various AI models may not be up to 0:14:24.120 --> 0:14:27.040 date as yet, but that's a minor issue that will 0:14:27.160 --> 0:14:30.920 improve as it has more linkage to contemporary websites and 0:14:30.960 --> 0:14:33.880 access to live data. So I noticed that when it 0:14:33.920 --> 0:14:37.800 came to the mandatory supernuation contributions, it did say twenty 0:14:37.880 --> 0:14:40.200 twenty three twenty twenty four financial year, and it said 0:14:40.280 --> 0:14:44.000 eleven percent. But we're not in twenty twenty three twenty four. 0:14:44.680 --> 0:14:47.720 No, But so then again, you know, to be fair, 0:14:47.880 --> 0:14:50.360 it was correct, they were correct figures. They were just 0:14:50.440 --> 0:14:54.240 out of date. That's that's right. And if that was 0:14:54.240 --> 0:14:57.760 an employee of yours, one of your many employees, tell me, 0:14:59.280 --> 0:15:01.240 what would you have I said in the performance review? 0:15:01.240 --> 0:15:02.720 Would you have said? What would you have said? They 0:15:02.720 --> 0:15:03.560 could have done better? 0:15:04.920 --> 0:15:06.720 They would have had to go brush up on their 0:15:06.720 --> 0:15:09.320 technical skills, because that's just not up to scratch. We 0:15:09.360 --> 0:15:14.400 can't go recommending clients with inaccurate technical information. And another 0:15:14.440 --> 0:15:16.920 area was around the preservation age. Actually, this one was wrong. 0:15:16.960 --> 0:15:19.680 It said fifty five, but it's actually sixty now, So 0:15:19.760 --> 0:15:23.080 fifty five was quite a while ago. With the preservation age, Yeah, 0:15:23.120 --> 0:15:23.320 what was. 0:15:23.360 --> 0:15:25.800 Quite a while ago. That's quite a file ago. That 0:15:25.840 --> 0:15:28.400 was actually completely wrong. That's sixty four years. 0:15:28.960 --> 0:15:33.400 That's right, And the other observation is that it in 0:15:33.440 --> 0:15:35.720 my opinion, it comes down to the prompting of what 0:15:35.800 --> 0:15:38.280 you say to the AI bot in terms of what 0:15:38.320 --> 0:15:41.400 the answer is. So with the super contributions, you asked it, 0:15:41.480 --> 0:15:43.680 what's the rate of tax on supercontributions? That came out 0:15:43.720 --> 0:15:47.400 at fifteen percent for concessional contributions, But if your income 0:15:47.480 --> 0:15:49.800 is above two hundred and fifty thousand, it's actually thirty 0:15:49.840 --> 0:15:53.800 percent contribution tax. So unless you knew that there's a 0:15:53.840 --> 0:15:55.920 different tax for people above and below two hundred and 0:15:55.920 --> 0:15:59.600 fifty thousand, the average Australian who's going to use chat 0:15:59.640 --> 0:16:03.640 chip or some other AI machine to understand their finances 0:16:03.880 --> 0:16:05.600 may not get the full pitch up because they're not 0:16:05.640 --> 0:16:07.040 asking the right questions to it. 0:16:07.400 --> 0:16:12.040 Okay, very interesting, yeah questions, Even assuming let's put it 0:16:12.000 --> 0:16:13.480 into side the fact that they were out of date, 0:16:14.160 --> 0:16:19.040 there's no context and there is really relevant context here. 0:16:19.120 --> 0:16:22.480 So for instance, on those that was true, the answer 0:16:22.520 --> 0:16:25.000 was true up to income of two hundred and fifty thousand, 0:16:25.040 --> 0:16:26.640 isn't that right? And if you were over two hundred 0:16:26.640 --> 0:16:28.280 and fifty thousand in your annual income there's a thing 0:16:28.320 --> 0:16:30.440 called Division two ninety three which kicks in, and there's 0:16:30.480 --> 0:16:34.160 another attack on Super and g gush. I'm hardly surprised 0:16:34.160 --> 0:16:36.040 at a I can't keep up with it because we're 0:16:36.040 --> 0:16:38.080 all struggling to keep up with it. Okay, we'll be 0:16:38.120 --> 0:16:41.680 back in a moment with some really interesting questions about 0:16:41.680 --> 0:16:57.720 the future financial advice. Hello, welcome back to the Australians 0:16:57.760 --> 0:17:01.160 Money Puzzle podcast. I'm James Kirby. The first time that 0:17:01.200 --> 0:17:04.119 I've had two guests on the show, one human and 0:17:04.320 --> 0:17:08.640 one AI bot, which is Microsoft's co pilot. We've had 0:17:08.640 --> 0:17:12.320 a bit of fun basically asking the bot about how 0:17:12.359 --> 0:17:14.679 to start in financial advice. Then we sort of lifted 0:17:14.880 --> 0:17:18.159 our game a bit and said pretty you know my 0:17:18.440 --> 0:17:21.520 ly advanced questions about Super and it wasn't as good 0:17:21.520 --> 0:17:23.760 on that part. I have to say now I'm just 0:17:23.800 --> 0:17:26.920 going to ask in this segment about the future financial 0:17:26.960 --> 0:17:29.720 advice itself and what might happen. And I think it's 0:17:29.720 --> 0:17:34.040 an extraordinary piece for the simple reason that initially you'll 0:17:34.080 --> 0:17:37.080 hear the bot gives a bland answer about job losses. 0:17:37.080 --> 0:17:39.200 I push it a second time and like a human, 0:17:39.320 --> 0:17:41.840 it takes a second read and actually gives a better answer. 0:17:41.880 --> 0:17:44.800 It's really interesting. Now this time I want to ask 0:17:44.840 --> 0:17:48.080 something more broad. Can you tell me will there be 0:17:48.200 --> 0:17:52.080 job losses in the future due to artificial intelligence due 0:17:52.119 --> 0:17:52.960 to AI. 0:17:53.480 --> 0:17:57.080 AI's impact on jobs is a complex topic. While some 0:17:57.200 --> 0:18:00.920 jobs may be affected, AI also creates new opportunities. 0:18:01.280 --> 0:18:03.520 Yeah, yeah, I know, sure, But I'm asking you. Do 0:18:03.560 --> 0:18:06.679 you think there will be job losses from AI in 0:18:06.720 --> 0:18:07.720 the next few years. 0:18:08.160 --> 0:18:12.040 Absolutely, It's likely that AI will lead to job losses 0:18:12.080 --> 0:18:15.120 in some sectors due to automation. However, it will also 0:18:15.200 --> 0:18:18.360 create new roles and industries. 0:18:18.920 --> 0:18:22.200 Okay. The industry I'm particularly interested in is financial advice, 0:18:22.720 --> 0:18:26.000 and of course that's the area invariably or other guests 0:18:26.040 --> 0:18:29.000 on the show are often from. What can AI offer 0:18:29.640 --> 0:18:33.040 in the business of financial advice and investment information? 0:18:34.040 --> 0:18:37.040 AI can offer a lot in the financial advisory space. 0:18:37.680 --> 0:18:42.600 It can analyze vast amounts of data quickly, provide personalized 0:18:42.680 --> 0:18:46.760 investment advice based on individual goals, and even predict market 0:18:46.760 --> 0:18:53.160 trends with advanced algorithms. Plus, it can streamline administrative tasks, 0:18:53.680 --> 0:18:56.960 allowing advisors to focus more on client relationships. 0:18:57.800 --> 0:19:00.280 Yeah, what would be the risk then for the day 0:19:00.320 --> 0:19:05.280 listener or investor taking AI information exclusively exclusively for the 0:19:05.359 --> 0:19:06.159 financial advice. 0:19:07.600 --> 0:19:12.800 Relying solely on AI for financial advice carries risks. There's 0:19:12.800 --> 0:19:16.240 the potential for over reliance on algorithms that might not 0:19:16.400 --> 0:19:22.160 capture the nuances of individual circumstances or market anomalies. Plus, 0:19:22.400 --> 0:19:26.000 without human judgment, there's a risk of missing the emotional 0:19:26.119 --> 0:19:28.719 or psychological aspects of investing. 0:19:29.480 --> 0:19:31.879 Okay, thank you very much. Great to have you on 0:19:31.920 --> 0:19:35.240 the show. Nice to talk to you, and well, I 0:19:35.240 --> 0:19:37.120 don't know if we'll have you on again, but thank 0:19:37.200 --> 0:19:38.320 you for coming on the show. 0:19:38.800 --> 0:19:39.720 Thanks for having me. 0:19:40.240 --> 0:19:44.639 Take care Well, that was a pretty interesting interview, certainly 0:19:44.640 --> 0:19:46.359 one of the more interesting interviews I've ever done. I 0:19:46.400 --> 0:19:48.520 can tell you that, folks, because I'm not used to 0:19:48.560 --> 0:19:53.120 talking to bots, and most people aren't. James, what did 0:19:53.160 --> 0:19:57.000 you think about the general quality of the information? I mean, 0:19:57.040 --> 0:20:00.119 I thought some of it ranged from seriously precise, and 0:20:00.160 --> 0:20:03.840 actually the precise stuff was inappropriate, I thought, But then 0:20:03.880 --> 0:20:06.120 the general stuff wasn't bad. What do you think? 0:20:06.960 --> 0:20:09.679 Yeah, it was okay. I would say I'd rate it 0:20:09.720 --> 0:20:11.600 as sort of like a seven out of ten. It 0:20:11.720 --> 0:20:14.479 covered a lot of broad principles, a lot of just 0:20:14.520 --> 0:20:17.040 general information that apply to a lot of people. But 0:20:17.320 --> 0:20:18.959 maybe if those books are a little bit off, they 0:20:18.960 --> 0:20:21.000 probably wouldn't be the first two that I'd give to 0:20:21.280 --> 0:20:23.720 everybody because they are a little bit complex in nature. 0:20:23.720 --> 0:20:25.520 But they're all books, and they're hard to read, and 0:20:25.680 --> 0:20:27.000 they're both American. 0:20:26.960 --> 0:20:29.919 That's right, So it probably just lacked that. Oh okay, 0:20:30.040 --> 0:20:31.879 a little bit of context around it would have been good. 0:20:31.920 --> 0:20:34.119 I'm an Australian investor, I'm forty five years old, so 0:20:34.160 --> 0:20:36.520 on and so forth, and I don't know it still 0:20:36.520 --> 0:20:38.680 maybe even the same ones, But again it comes back 0:20:38.720 --> 0:20:42.280 to these issues around these AI models. They're still relatively new. 0:20:42.760 --> 0:20:45.480 Yes, okay, now there were I thought it was good 0:20:45.520 --> 0:20:51.320 on the basics there, like ETFs, you know, and having goals. 0:20:51.840 --> 0:20:54.040 I thought that was quite good. I mean there were 0:20:54.160 --> 0:20:57.280 very general answers, but there were very general questions, and 0:20:57.520 --> 0:20:59.480 I don't think, what did you? And she only fought 0:20:59.520 --> 0:21:03.600 with the B principles or approach that it took. 0:21:05.359 --> 0:21:08.959 I had no concerns with what it said generally about ETFs, 0:21:09.040 --> 0:21:12.280 but I guess the next step with an AI financial 0:21:12.280 --> 0:21:14.359 adviser would be to say, well, which ones for me? 0:21:14.600 --> 0:21:17.399 And then that just opens up this whole conversation that 0:21:17.480 --> 0:21:19.879 typically someone would have with a face to face advisor, 0:21:20.000 --> 0:21:24.320 because the AI financial advisor can look at the whole 0:21:24.400 --> 0:21:26.679 list of ETFs that are available through this ground and 0:21:26.680 --> 0:21:30.280 share market. But it's not going to be as good 0:21:30.320 --> 0:21:33.000 as picking well what about time in market conditions should 0:21:33.000 --> 0:21:35.080 be dollar cost average in and it can do the 0:21:35.119 --> 0:21:38.080 basics on risk return metrics, but it's going to take 0:21:38.119 --> 0:21:40.680 a very big conversation, like you need to know quite 0:21:40.680 --> 0:21:42.200 a bit to be able to get the best out 0:21:42.200 --> 0:21:43.440 of it to get what you want. 0:21:43.840 --> 0:21:45.840 Yeah, it'll be interesting to talk to it the morning 0:21:45.880 --> 0:21:49.920 after a crash. That would be really interesting because it 0:21:49.960 --> 0:21:53.159 would be on emotional on like the human advisors and 0:21:53.200 --> 0:21:56.560 stuff workers that we might be talking to. Okay, now 0:21:56.640 --> 0:21:58.399 I tell you, well, I tell you what I didn't like. 0:21:58.880 --> 0:22:01.560 As one stage, it says retirement needs can vary greatly. 0:22:01.600 --> 0:22:04.560 A common rule of thumb is for aiming for seventy 0:22:04.560 --> 0:22:09.040 to eighty percent of your current income in retirement. Oh yeah, 0:22:09.280 --> 0:22:11.800