ChatGPT Is Becoming Your Financial Adviser — But Should It?
Artificial intelligence (AI) has become increasingly commonplace in our day-to-day lives, especially to help accelerate research and automate administrative tasks. It’s also being used to help people with their money.
Whether it’s asking ChatGPT to explain retirement accounts, summarize investing terms or compare financial strategies, AI can make complex money topics easier to understand in seconds. However, while AI tools are becoming more common, they’re not infallible. That raises a major question — should you trust ChatGPT as your financial advisor?
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AI Is a Powerful Starting Point
According to new reporting from Kiplinger (based on research from the CFA Institute), roughly one-third of Gen Z and millennial investors already use generative AI to learn about investing, which isn’t surprising. AI can quickly explain financial concepts and summarize market trends, as well as help users organize and digest dense amounts of financial information.
AI excels in making complicated financial information more accessible to laypeople by explaining fiscal concepts in simple language.
“I actually think [AI] can be a great starting point,” business consultant Latoya Gordon told MoneyLion. “If you're trying to understand the difference between a business loan and a line of credit, figure out what documents you might need before applying for funding or learn basic financial terms, AI can save you a lot of time.”
… But It Can Still Fall Short
“Where I think people get into trouble is when they start treating AI like it's their financial advisor,” Gordon added.
“Money is personal. Your income, debt, goals, risk tolerance, business stage, even your habits all matter. AI doesn't know that unless you tell it, and even then it doesn't know the full picture. I've seen business owners ask AI, ‘Should I apply for this loan?’ That's not really the question. The better question is, ‘Can my business afford this loan? Is this the right type of funding? What's my plan to pay it back?’ AI can't sit across the table and challenge your thinking the way a good advisor can.”
Essentially, the problem with AI as a financial advisor is that information isn’t the same thing as judgment.
The CFA Institute’s research found that more than half of Gen Z and millennial investors have made at least one FOMO-driven investment. That fear of missing out, Kiplinger said, was primarily in purchasing cryptocurrency. That’s exactly where a human advisor can offer something that AI can’t: accountability.
While AI can produce fluent, confident-sounding answers to your questions, it will never have the professional experience that comes from navigating real market cycles or years of helping people make financial decisions, all of which is why human advisors are still extraordinarily valuable (and they would have told you not to jump the gun on crypto).
The Bottom Line
“I look at AI the same way I look at Google,” Gordon said. “It's a great place to learn, organize your thoughts and come up with better questions. But when you're making a decision that could affect your finances for years, whether that's investing, taking on debt or growing a business, I still think you need a real person who can ask questions AI never will.”
AI tools can be useful for learning the financial basics and organizing financial information. Yet when it comes to major financial choices, the latest research still suggests that young investors still need something that AI can’t fully provide: human judgment.
As financial information becomes easier than ever to generate, knowing who — and what — to trust is more important than ever.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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