New Working Paper

Professor Dr. Lars Hornuf has published a new working paper under the title "Using GPT-4 for Financial Advice.“ The article emerged in collaboration with Prof. Dr. Christian Fieberg and Jun.-Prof. Dr. David Streich.

The authors show that the recently released text-based artificial intelligence tool GPT-4 can provide suitable financial advice. The tool suggests specific investment portfolios that reflect an investor’s individual circumstances such as risk tolerance, risk capacity, and sustainability preference. Notably, while the suggested portfolios display home bias and are rather insensitive to the investment horizon, historical risk-adjusted performance is on par with a professionally managed benchmark portfolio. Given the current inability of GPT-4 to provide full-service financial advice, it may be used by financial advisors as a back-office tool for portfolio recommendation.