New AI assistant is doing out money advice on personal finance app

7 min read

Professional financial planning often left out those who couldn’t afford it.

One personal finance app wants to change that by incorporating an artificial intelligence assistant to provide personalized advice to users.

Wally, the free app that allows users to sync and manage their accounts and monitor their finances, is adding WallyGPT, which can answer users’ questions about their finances, help them plan for the future, and offer insights into investment opportunities and financial literacy, the company said Wednesday.

The development underscores some of the ways AI could change financial planning for the better, but the new technology also raises questions about privacy and the role financial planners will play in the age of AI.

“Wally has always been at the forefront of personal finance management, and the introduction of WallyGPT is a testament to our commitment to continuous innovation,” said Saeid Hejazi, CEO and co-founder of Wally, in a recent company press release. “We believe that WallyGPT will empower our users to make more informed financial decisions while maintaining the utmost privacy and security.”

WallyGPT lists the average costs and savings needed for a wedding in Athens.

WallyGPT lists the average costs and savings needed for a wedding in Athens.

Wally has operated in the personal finance space since 2013 when the company was founded, but the new GPT function makes it even easier for users to plan, Hejazi told Yahoo Finance. According to him, Wally’s new tech prepares data based on users’ questions and combines it with intelligence from OpenAI, an artificial intelligence research laboratory.

For example, he said his brother, who is getting married, asked the app to help him understand the respective costs of a wedding in three different countries.

“It gave him line items of how much it would cost in each of these places,” Hejazi said. “The attire, the number of guests, and the food, and all of these things.”

When Hejazi’s brother asked the app how much he needed to save for the wedding, WallyGPT responded by telling him how much he had in cash, his income, his liabilities, and the final amount of money he needed for the occasion.

Hejazi said the new technology can help users with just about any financial goal such as coming up with a retirement plan.

For instance, imagine someone might want to retire in the Caribbean or Thailand, Hejazi said. The app would integrate locations along with variables like age, income, and even student debt to generate a retirement plan. Hejazi added that WallyGPT could also make finances easier to understand for regular folks.

“The terms and the words and the products that these banks and lenders come up with, WallyGPT can explain things in ways that are easy to understand,” Hejazi said. “And so I definitely think that the retirement part or any kind of goal planning, family planning stuff like that we fit more comfortably in.”

WallyGPT details how a user's spending has changed.

WallyGPT details how a user’s spending has changed.

Although many have begun using AI in their jobs, financial planners have a complicated relationship with the burgeoning technology. For instance, Grant Meyer, founder of GTS Financial, raised concerns about ChatGPT and privacy, noting that ChatGPT is not confidential.

“I’m assuming whatever information you plug into it is being used in some way shape or form and is accessible by a tech at the company,” he said of ChatGPT. “Therefore, I’m reticent to put any specific client info as I can’t reasonably prove it is private at this point in time.”

Hejazi said Wally doesn’t collect usernames, passwords, consumers’ gender, or even names. All users must provide to register on the app is their email address. The company also doesn’t store credit card information, cannot make transfers, payments or charge your card, according to WallyGPT’s website.

Further, OpenAI and WallyGPT also have a strict privacy agreement. OpenAI cannot use WallyGPT data for training purposes. OpenAI must also automatically delete WallyGPT’s data after 30 days.

“It’s a value for us. But it’s also a value for other people that matters. It’s valuable for the end user,” Hejazi said. “And it’s important for the regulators, especially European ones, when they apply it to their continent.”

Grant was also enthused by WallyGPT’s privacy terms.

“Regarding their privacy policy – ​​I really like it! Much better than others and seems pretty decent,” he wrote to Yahoo Finance. “I’d feel more comfortable using that over a generic AI like Bard or ChatGPT. I like that they aggregate and anonymize the info and don’t sell it.”

OpenAI logo and AI Artificial Intelligence words are seen in this illustration taken, May 4, 2023. REUTERS/Dado Ruvic/Illustration

OpenAI logo and AI Artificial Intelligence words are seen in this illustration taken, May 4, 2023. REUTERS/Dado Ruvic/Illustration

Hejazi’s new tech also raises the question of whether financial planners will soon be anachronisms.

But financial advisors say their jobs are more than just number crunching. For example, Kevin J. Brady, vice president at Wealthspire Advisors, is doubtful that apps like WallyGPT will replace human advisors. He noted that advisory firms often struggle to grow organically due to high acquisition costs for clients.

“When you combine that fact with the fact that many people need a push to get them to take action and disrupt inertia, it remains difficult for me to see a scenario where AI threatens good advisors,” he said. “Instead, as I’ve noted, it will make those of us who understand and embrace it more productive.”

Meyer agreed that humans would still play a role in financial guidance going forward. He insisted that there was a “difference between using AI to answer basic questions and getting personal one-on-one guidance.”

“I think this will be a great way for people to get quick, reliable answers. Where AI is much better than an advisor in offering automated ‘insights’ such as ‘you spend 20% more on dining out than people like you,'” he said. “I think a good advisor will be using tech like WallyGPT to provide this information to clients.”

“If you’re an advisor and WallyGPT can replace you, I’d argue that you were not a comprehensive financial planner. You were more of an order taker or a salesperson,” he added.

WallyGPT explains the best investment strategy during a recession.

WallyGPT explains the best investment strategy during a recession.

For now, Hejazi also thinks human beings will be integral to the financial planning process — provided they embrace AI. He does see this new tech replacing robo-advisors, the digital financial advisors that have come to prominence in the last decade, before it replaces people.

“We might notice now that the word robo-advisor was not aptly named as it is not as appropriate as it is today,” he said.

As for financial planners?

“The planners who thrive in the age of AI will balance their personal relationships with clients while leveraging the power of AI to make better decisions,” he said.

Ultimately, Hejazi hopes, one day, people’s finances will be “completely managed by AI” from the moment they receive their first paycheck.

“Savings goes into the best savings account, because that’s what the AI ​​found,” Hejazi said. “You don’t know what the bank is, you don’t know where they’re based, but they’re providing 5%. Or it takes a little bit of money and puts it in the stock market. And when a stock stops performing, it automatically takes it and puts it in something else.”

The process would allow humans to sit back and let their finances manage themselves more or less, he said.

“To make it as passive as possible, something that just works in the background,” he said. “Just have something that just works for you. And it does it 24 hours, seven days a week, behind the scenes.”

Dylan Croll is a Yahoo Finance reporter.

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