Morgan Stanley has launched a new partnership with OpenAI, the creator of ChatGPT, to create a custom product for its ranks of
The wirehouse announced March 14 that it had secured exclusive rights within the wealth management industry to use certain aspects of OpenAI's new technology and was first among peers to partner with it on the new products.
"We are leveraging [it] to develop bespoke solutions for our Financial Advisors — a first in the industry," Andy Saperstein, co-president and head of Morgan Stanley Wealth Management, said in an internal memo to the firm's financial advisors Tuesday. He added that OpenAI had been selected for the partnership after Morgan Stanley reviewed "hundreds of startups and tech firms" for offerings that would improve user experience for clients and advisors.
The tool uses GPT-4, a more advanced cousin of the
"We will first leverage OpenAI's technology to internally access, process and synthesize our expansive range of intellectual capital," Saperstein said, adding that the GPT-4 software would be trained not from broader internet content but only from Morgan Stanley-produced content by its in-house experts.
It will then allow financial advisors to ask questions that the technology can use to build detailed, "easily digestible" answers based on internal firm documents and research. The chatbot's answers will link to articles, citing its sources for ease of reference among advisors and clients, according to a
"It will be like having our Chief Investment Strategist, Chief Global Economist, and Global Equities Strategist on call for every Financial Advisor 24/7," Jeff McMillan, the head of Analytics, Data & Innovation for Morgan Stanley Wealth Management, said in the press release.
Monitoring advisors' behavior and feedback, the firm will fine-tune the bot over time.
"This will drive efficiency and scale in their practices in ways never thought possible and allow them to focus more time on what they do best — serving their clients," Saperstein said.
The idea is that by reducing busywork for advisors and automating time-consuming labor such as searching for research to inform portfolio strategy or persuade a client to consider certain decisions, financial advisors can be better positioned to offer holistic financial planning to clients and form an emotional connection to them that leads clients to bring outside assets in house — the gold at the end of the rainbow for Morgan Stanley and many other wealth managers.
"Once they understand the content and the advice that we can offer, all those individuals begin to also migrate or move money from external sources into Morgan Stanley," Sharon Yeshaya, the chief financial officer at Morgan Stanley, said to investors and analysts at the Credit Suisse financial services conference last month, speaking of clients in the workplace channel who moved a total of $150 billion of assets into the "advice-based" wealth management channel over the last three years.
Saperstein added that this announcement is not an end but a beginning of many more AI tools that Morgan Stanley intends on adopting, including other technologies from OpenAI — among them, products that would "enhance the insights from Financial Advisors' notes and streamline follow-up client communications."
Other Morgan Stanley AI projects leading up to this include Next Best Action, "an internally-built AI-based engine that delivers timely, customized messages to clients and prospects guided by the Financial Advisor," the press release stated. "MSWM has also been implementing its proprietary
The GPT-4 technology is currently in testing. The firm expects a full rollout by early summer, a company spokesperson said in an email.
Dr. Richard Smith, co-founder of the investing tool Finiac, said in an email that the announcement reflects an "inevitable" pattern of businesses in the industry moving to use artificial intelligence more, especially GPT-4's precursor ChatGPT, which he sees becoming "widely adopted" to improve efficiency.
"Businesses that do integrate ChatGPT are likely to see productivity improvements — provided that they don't forget that it is, in the end, just a tool and not intelligence itself," Smith said.
Morgan Stanley is "100% right to make the investment in language models," Andrew Altfest and Luis Quiroz, co-founders of AI wealthtech firm FP Alpha, wrote in a joint email.
Altfest is the CEO and president and Quiroz is the chief technology officer at FP Alpha.
"With technologies like the GPT series or FP Alpha, the early adopters of AI will have an edge on automating operations and doing more for clients."
