Using AI to Help Plan Your Finances? Here’s What ChatGPT Gets Wrong
More people from Gen Z and Millennials are turning to AI tools like ChatGPT to learn about investing. New research shows that 25% of these groups use AI for financial guidance. But is ChatGPT actually reliable for managing your money?
AI’s Accuracy on Financial Questions
Broker analysis site Investing In The Web tested ChatGPT with 100 personal finance questions, including topics like saving for a child’s education and investing in gold. Expert reviewers found that 65% of the answers were accurate, but 29% were incomplete or misleading, and 6% were outright wrong.
It’s not just ChatGPT. Many Google searches now display AI-generated finance summaries at the top of results. A study by financial services agency Indulge found that 25% of these summaries were inaccurate. Ironically, Indulge used ChatGPT’s latest model to fact-check those summaries, highlighting the limits of current AI tools.
Why Does Generative AI Get It Wrong?
- AI responses depend heavily on the quality of prompts and the data it was trained on. Outdated or flawed data leads to errors.
- ChatGPT doesn’t typically show its sources or explain how it arrives at answers.
- The model is built to sound confident and polished, even when it’s guessing—sometimes like a smooth talker bluffing through an interview.
How Does This Compare to Human Advice?
Humans aren’t perfect either. The Financial Ombudsman reported 1,459 complaints about financial advisers last year, with 57% upheld for issues like misselling or unsuitable advice. Professional financial advice often remains out of reach for many.
A poll by Schroders found that 75% of advisers won’t take on clients with less than £50,000 to invest. Advisers usually charge fees based on investment size, making smaller portfolios less profitable to manage.
With banks and pension providers not regulated to give financial advice, it’s easy to see why more people are turning to AI tools.
Financial Firms Are Starting to Adapt
The Financial Conduct Authority (FCA) is updating rules to allow firms to offer more targeted support, sometimes using AI. For example, pension funds might warn customers if they withdraw money too quickly, or investors could be alerted about cheaper fund options.
One firm spotted a customer’s regular gambling on their pension and bank statements, then intervened by urging them to seek help before cashing out their retirement funds. Some advisers use AI to automate administrative tasks, lowering costs and enabling them to serve clients with smaller portfolios.
Startups like Octopus Money combine AI-generated suggestions with human coaching, blending technology and personal touch.
AI Tools Offering Financial Feedback
Specialised chatbots can review your finances and highlight strengths and weaknesses. For example, Cleo uses two modes: “hype mode” celebrates good habits, while “roast mode” playfully calls out bad spending. Most users prefer the tough love approach.
Tips for Using ChatGPT for Financial Advice
- Be specific and detailed with your prompts to get better answers.
- Always ask for sources to verify the information.
- Remember ChatGPT’s answers might not be current or relevant to your country’s regulations.
- Check privacy settings if you’re concerned about data usage for training future models.
- Never treat its advice as gospel—use it as a starting point, not a final decision.
Specialised financial AI could improve over time, but for now, it’s wise to be cautious. When it comes to your investments, you want trustworthy guidance—not just polished talk.
For those interested in improving their AI skills for finance, consider exploring AI tools tailored for finance to better understand how to apply these technologies responsibly.
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