Are more people turning to AI for their financial planning options? Although useful for research, various dangers and inaccuracies can occur when people use AI to plan their finances. We look at the concerns and risks of using AI for your financial planning and why these tools should be used for insights only.
Can you use ChatGPT as a financial advisor?
In a recent meeting, one of our clients discussed using YouTube and AI for financial planning research. The client acknowledged it isn’t as good as professional advice, but this raised some concerns among our team. Although AI tools draw from online sources based on factors such as trust and authenticity, they are notoriously inaccurate.
In a recent LLM Benchmarks report, leading AI technologies were rated in terms of real-world scenarios in the areas of compliance, coding, and reasoning. The most accurate model was OpenAI (who owns ChatGPT), which scored 76%, meaning there’s a margin of error around 14%. Other AI tools, such as Gemini, scored 71.1%, resulting in a 19% margin of error, and Claude scored 70.4% with nearly a 20% error margin.
Would you risk your hard-earned money on technologies with such high error rates? One of the biggest issues of using AI is the credibility of the sources “scraped” for “financial advice”. There’s nothing to stop an unregulated person creating a YouTube video and relaying their own opinions as so-called financial advice. AI-driven financial advice creates real dangers.
Although general updates on financial products and savings accounts can be useful, direct advice should never be given because it could cause significant damage. In fact, no credible financial advisor or financial planner would ever give detailed advice on a public forum as everybody’s financial circumstances are different. One size does not fit all. Instead, financial planning should be personal and tailored to each person and their individual circumstances.
The problem with retirement planning with AI
The recent trend for people to use AI for their retirement planning is worrying and could create issues later in life. Although you can find plenty of information online to help you plan your retirement, you need to check the credibility of all online financial sources.
The risk of following poor or inaccurate AI advice is that you could lose your retirement savings due to a bad decision. This can happen to people who are victims of sophisticated scams, but there’s a risk of this happening with AI too.
When people believe they have created a “sensible” financial plan based solely on AI research, how will they know if it’s accurate? There’s a real risk of running out of money before the end of retirement, which could result in problems and large debts.
As the online world is largely unregulated, you are at risk of potential frauds and scams. Using AI for financial planning purposes could wrongly encourage someone to act in a way that could seriously harm their finances. They might feel compelled to transfer a pension or move their savings into a “lucrative investment”, risking everything they’ve earned.
Financial planning should be tailored to you
A professional approach to financial planning involves detailed cash-flow planning, so you can see what money you have and how long it will last. Your cash-flow plan is a key part of a Lifetime Financial Forecast, which helps to ensure you never run out of money.
Your Lifetime Financial forecast underpins your financial plan, which will help you fund your lifestyle and retirement. Based on your personal aims and aspirations, your financial plan will enable you to live a more fulfilled life.
With thoughtful planning, the right strategies, and a clear focus on protecting your wealth from inflation and erosion, you can approach retirement with more confidence. Instead of your goal being to just have “enough”, you can enjoy long-lasting financial security.
Your Chartered Financial Planner in Nottingham
Instead of relying on unreliable AI solutions that require fact-checking, why not talk to a qualified human who can tailor their financial advice to you? Financial planning should always be highly personalised to ensure relevance, accuracy, and peace of mind.
At Balance: Wealth Planning, our Chartered Financial Planners will help you build your financial plan, so you can look forward to a secure future. With careful planning and the right approach, you’ll have enough money to support your lifestyle and your retirement. Our team will advise you on suitable ways to protect your wealth and make your savings last.
For professional financial advice and retirement planning, get in touch to speak to our financial planning team.
Sources:
(Balance: Wealth website)
https://www.timetoact-group.at/en/insights/llm-benchmarks/llm-benchmarks-march-2025
