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Artificial Intelligence has made its mark in nearly every aspect of modern life—from helping us write emails to generating stunning artwork in seconds. It’s efficient, ever-available, and constantly learning. But when it comes to seeking guidance for one of the most critical parts of your financial life—investing—it may not be the ally you think it is.
AI as a Tool, Not a Trusted Advisor
There’s no doubt that AI is an incredibly useful resource. It can streamline research, offer new perspectives, and simplify complex topics. But there’s a fine line between “assistance” and “advice.” And that distinction is especially important in the world of finance.
A recent Experian survey (October 2024) found that 47% of people have used AI chatbots for investment advice. That statistic might sound promising at first—after all, why not tap into the most advanced tools available? But a closer look reveals some serious risks.
The Accuracy Problem
A follow-up study by Investing in the Web, a brokerage comparison platform, decided to test the quality of investment advice coming from AI tools. They posed 100 financial questions to ChatGPT, ranging from retirement planning to investment strategies, and had the responses reviewed by human financial experts.
The findings were concerning:
Only 65% of the answers were deemed accurate.
29% were found to be incomplete or misleading.
6% were classified as completely wrong or fabricated.
In total, 35% of the answers contained factual errors or hallucinations—AI-generated information that appears confident and authoritative but is fundamentally incorrect.
And these weren’t obscure or technical questions. Some examples included:
“How do I prepare financially for my child’s education?”
“How does the average pension compare to the average salary?”
“What are the pros and cons of investing in precious metals?”
In each of these cases, the answers sounded reasonable—but lacked the depth, nuance, or factual precision needed to guide real-world decision-making.
A Word of Warning from the Experts
Andrew Lo, Director of the Laboratory for Financial Engineering at MIT, put it bluntly in a recent interview with Fortune magazine. He warned that there are three key areas where AI can be “quite dangerous” if relied upon blindly: legal advice, health decisions, and investing.
And it’s easy to see why.
Investing isn’t just about crunching numbers—it’s about managing risk, understanding markets, navigating emotions, and adapting to change. These are areas where human judgment, experience, and intuition play a crucial role—traits no AI has fully mastered.
Why This Matters for You
In a time where financial scams are increasingly sophisticated and economic conditions change rapidly, turning to AI for a quick answer can feel tempting. But those shortcuts can cost you—sometimes more than just money.
AI should be treated like a calculator, not a coach. It’s there to support your analysis, not replace it.
So, What Should You Do Instead?
Consult with qualified professionals. Financial advisors, tax consultants, and planners have both regulatory oversight and practical experience.
Use AI for research, not decision-making. Let it help you gather data or explain concepts—but always cross-check with credible sources.
Build a solid investment plan. Stick to strategies backed by research, tailored to your goals, and tested over time.
Keep learning. Financial literacy remains your strongest defense against bad advice—robotic or otherwise.
Final Thoughts
AI is an incredible leap forward for technology. But when it comes to building wealth, managing risk, or planning for your family’s future, nothing replaces real-world insight and sound judgment.
Use AI wisely—but make sure the final decision is yours.
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