Morgan Stanley partners with OpenAI on internal chatbot for its advisors

Answers to advisors' questions will be generated exclusively using Morgan Stanley's library of content and data.

Morgan Stanley Wealth Management is one of just a handful of companies, and the only wealth management firm, getting early access to GPT-4, the latest version of text generation artificial intelligence from OpenAI.

The brokerage plans to use OpenAI’s technology to create an internal-facing chatbot. Financial advisors and their teams can ask questions of the chatbot, and answers will be generated exclusively from Morgan Stanley’s proprietary content library, including investment strategies, market research and commentary, and analyst insights.

Instead of having to comb through PDF files hosted on internal websites to find answers to specific questions, advisors can simply ask the AI what they need and receive a plain-English answer with links to the source documents.

“You essentially have the knowledge of the most knowledgeable person in Wealth Management — instantly,” Jeff McMillan, the firm’s head of analytics, data and innovation, said in a blog post.

More than 200 employees are currently using the system on a daily basis and providing feedback to hone the software into something that’s as useful as possible for financial advisors, McMillan said.

The firm is also exploring how technology from OpenAI, the company beyond the popular ChatGPT software, could enhance insights from financial advisors’ notes or improve follow-up client communications. Morgan Stanley will not be using ChatGPT, which was based on GPT-3.5 and generates responses from the public internet.

In an internal memo, Andy Saperstein, co-president and head of Morgan Stanley Wealth Management, called the partnership an “important milestone” for the firm and its advisors.

“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 in the memo. “This is the first of what we anticipate will be many AI-powered tools and capabilities designed to better serve clients, including additional OpenAI technology we are considering.”

OpenAI unveiled GPT-4 on Tuesday, calling it a more accurate, creative, collaborative and safer AI built based on six months of lessons learned from products like ChatGPT. The latest software is “40% more likely to produce factual responses,” according to the company, and can also handle text and image queries.

Microsoft, which invested more than $10 billion into OpenAI, is using the GPT-4 to power its Bing search engine, according to Bloomberg. Payments fintech company Stripe is testing how it could be used to combat fraud.

The tool will be available to paid subscribers to OpenAI’s ChatGPT Plus product, allowing developers at other companies to build applications with it.

The largest impact generative AI like GPT-4 will have on financial advisors is in how it’s incorporated into tools they already use, Joseph Lo, head of enterprise platforms at Broadridge, said in an email.

“Specifically, areas of opportunity include using generative AI to identify gaps in an advisor’s knowledge about the client, education and training for new products, proactively notifying and summarizing to clients and advisors about market activity, natural language processing for notes and summarizing action items, as well as personalizing marketing activities,” Lo said.

Advisor-facing fintechs like FMG Suite and Orion Advisor Solutions have already revealed concepts for how the technology can improve their products.

More than two-thirds of global wealth management C-suite leaders say AI is now changing the way they work, according to Broadridge’s 2023 Digital Transformation study. The mainstream excitement generated by programs like ChatGPT has helped set expectations about what it can do within the industry, Lo added.

“So while the use of AI technologies is not necessarily new, it is expected that wealth management firms will increasingly prioritize AI technologies such as ChatGPT to improve their capabilities,” he said.

[More: Advisors must evolve to survive in the AI era]

The partnership with OpenAI adds to Morgan Stanley’s existing AI capabilities. The firm already has Next Best Action, which was first announced in 2018 and built in-house, to deliver custom messages to clients and prospects. Morgan Stanley has also been implementing Genome, another proprietary software, to personalize communications to clients in its self-directed and workplace channels.

But the firm made clear that it’s looking at how AI can replace the work of financial advisors.

“We of course will never change our steadfast belief that trust-based relationships and human advice will always be valued by clients, and the Financial Advisor and their teams will remain the center of our wealth management universe,” Saperstein said in the memo. “We have built an ecosystem unlike any other, inclusive of financial advisors, the workplace and our self-directed channel. Taken as a whole, these channels create a variety of potential use cases for emerging technologies that can be explored simultaneously.”