Edward Jones takes advice from Purdue about investing with AI

While using artificial intelligence may be taboo on many college campuses, the Mitch Daniels School of Business is bringing AI to the forefront of classes.

Deniz Yavuz, a finance professor, is teaching two courses about how technology can be used to improve investing for individuals and companies.

The Fintech courses teach students how technological advancements affect the financial world and how to adapt to those changes, Yavuz said.

Richard Ryffel, a Purdue executive director of business leadership, said AI can expand financial services to more people and optimize the advising system.

AI will be the next step in the financial realm. It gives more people access to advice and becomes much more convenient for everyone, he said.

“You can do it at three in the morning. You can do it while you’re on an airplane. You can do it while you’re on the beach,” Ryffel said. “It’s just a much higher level of service and convenience.”

Ryffel and Yavuz collaborated with Edward Jones, a large financial firm, and studied how integrating AI and the advancement of technology could affect the business.

In the case study, they reached similar conclusions about using AI but made a clear distinction for when the use of AI should be forbidden.

“We will not put the AI in front of the client directly. You have to put a skilled human between the client and the AI … If the machine comes back with hallucinations, then the skilled advisor can say, ‘That’s not quite right,’” said Penny Pennington, the managing partner at Edward Jones, in the case study.

In a special conference, Yavuz invited high-level management from Edward Jones to listen and talk to students about the advantages and disadvantages of using AI in their business.

“Students answered these questions, and (the management team) got to listen. Then we asked the same questions to them, and (students got to hear how) they actually implemented AI,” he said.

One issue students highlighted was the reliance on AI instead of people and how that shift would affect the face of the company.

“What makes (some companies) unique is that they already have … personal relationships that they have cultivated over a long time period,” Yavuz said.

One of these companies is ForwardLane, a financial investment firm based out of New York. The company is working to integrate AI into its business while still maintaining a personal touch with its clients.

The company uses AI to optimize the data collection portion of finances, which allows its advisors to focus more on the personal interactions between clients, said Nathan Stevenson, CEO of ForwardLane.

“A large part of being a financial advisor is being a psychologist and being a friend — kind of like a trusted ear or a good doctor,” Stevenson said.

He also said AI can act as an equalizer for all people, “bridging the gap” between the ultra-wealthy and the majority of people.

Stevenson said financial AI could benefit students.

“If you’re a freshman, or you don’t have a lot of money, then those people (and larger financial firms) are not going to work for you. (With AI) you can get more personalized service like these ultra-rich people are getting,” he said.

AI will continue to improve as more people use it, and its suggestions in the financial world will become more timely and accurate, Yavuz said.