FINANCIAL and AI experts have warned consumers against using ChatGPT for financial advice but say it can prove useful in helping people get more informed on money matters — and helping them ask real humans the right questions.
On November 30, 2022, OpenAI introduced ChatGPT to the world. Just three years on, the system has 800 million users and answers 29,000 prompts a second.
With a significant percentage of those prompts focusing on personal finance issues, from pensions and mortgages to tax and investments, Newspage spoke to AI and financial experts about whether or not ChatGPT should be used for advice.
The AI hype cycle
Rohit Parmar-Mistry, AI expert and Founder at Burton-on-Trent-based Pattrn Data, says a key part of the problem is the way the AI industry seeks to frame intelligence: “The biggest lie in the current AI hype cycle is that intelligence is just data processing. It isn’t. Real financial advice requires context, empathy and, crucially, accountability, three things ChatGPT completely lacks.
“I’ve spent a decade helping companies implement automation, and the golden rule is always the same: AI is a tool, not a replacement for judgment.
“When you ask ChatGPT for financial advice, you are getting a generic aggregate of the internet’s wisdom AND its stupidity, masquerading as expertise. It doesn’t know your family situation, it doesn’t care if you retire poor and it certainly won’t be there to pick up the pieces when the market turns.
“We are seeing a dangerous trend where people treat these chatbots as objective truth-tellers. They aren’t. They are pattern matchers.
“If you want to use it to learn the difference between an ISA and a SIPP, go ahead. That’s financial literacy. But using it to plan your financial future? That’s just gambling with extra steps.”
Stranger in the pub
Colette Mason, Author & AI Consultant at London-based Clever Clogs AI, also cautioned against using ChatGPT as your adviser: “If you’re using AI for financial advice, treat it like asking a very clever stranger in the pub: useful for perspective, reckless for final decisions.
“AI can model scenarios, explain jargon and can help you think, but it has zero accountability if it gets your pension, tax or risk profile wrong.
“Plus the tax man will take a dim view of your methods. The danger isn’t that ChatGPT is stupid; it’s that it sounds confident even when it’s guessing.
“The smarter move is this: use AI to sharpen your questions, gather options and understand the landscape, then let a regulated human advise you. A bot can draft a financial plan but it can’t implement the right financial outcome for you.
“So the real question isn’t ‘Should you use ChatGPT for financial advice?’, it’s ‘Are you relying on it to replace professional judgement?’ If you are relying on it, that’s a no. If it’s helping you feel informed and brilliant before speaking to a bona fide money expert, that’s a yes.”
The good ol’ US of A
David Belle, Founder and Trader at Fink Money, took a contrarian stance and said one positive of ChatGPT is that the platform is based across the pond.
He continued: “ChatGPT is American and we Brits could do well with some American knowledge on investing and markets with less of the traditional British view on finances.
“It is arguably better than some of the advice that is spouted by various regulated financial advisers, not necessarily because of their lack of knowledge, but more because of regulatory capture.”
Michelle Lawson, Director at Fareham-based Lawson Financial, said “AI has its place but wholly relying on it for professional advice is dangerous in my opinion”.
She continued: “It is vital that people use it for a guide and then seek professional advice and clarity around the content before acting.
“Many years of study, knowledge and experience cannot be replaced by AI and it also misses the human empathy and sentiment.”
AI can get key figures wrong
Rob Mansfield, Independent Financial Advisor at Tonbridge-based Rootes Wealth Management, said AI may not pick up all the rules.
He continued: “By all means use AI for research but don’t rely on it. Many of us will have felt poorly, googled symptoms and concluded that we’ve got whatever comes up but when you go to the GP it’s nothing more than the common cold.
“AI is a supercharged version of that. It can help with a basic understanding but it only works if you question it and really think about it. Pension contributions are a great example.
“It’s generally a good idea to pay into a pension but there are rules around how much you can contribute, which aren’t always picked up by an AI model and so you could accidently breach your allowances.”
Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, said AI is a useful tool to learn from but shouldn’t be relied on.
She added: “ChatGPT can help you explore ideas and think through your own money habits, but that’s very different from giving proper financial advice. AI only works with what you put into it, so if your prompt misses key details, it will give you confident answers that can be completely off.
“It also struggles with nuance and I’ve seen it mis-state tax rules or oversimplify choices that hinge on small facts. Use it to learn and get clearer on the questions you want to solve. Just don’t rely on it to decide anything that affects your income, your pension or your family.”
The value-add of AI
Chris Barry, Director at London-based Thomas Legal, said many of his firm’s clients are using AI to ask the right questions and believes it does offer some value in that regard.
He continued: “Pre-ChatGPT, I would rarely speak to a client who would ask lots of questions before instructing.
“Now I am asked all the right questions, which I enjoy answering such as our qualifications, expertise, service levels and capacity. AI seems to be the driving force behind that.
“It can make you ask questions that may not otherwise enter your mind and that’s a powerful thing. Law firms need to market their strengths so AI can pick it up and push them into the mix as a strong option for a potential client.”
What does ChatGPT think?
Thinking outside the box, Rohit Kohli, Director at Romsey-based The Mortgage Stop, asked ChatGPT itself whether people should use it for financial advice.
Its response? “It said no. The exact response was: You shouldn’t rely on ChatGPT for regulated financial advice. It’s useful for general explanations, lender criteria, and helping you prepare questions, but it can’t assess your circumstances, recommend products or meet FCA requirements.
“For anything that affects borrowing, protection, or long-term finances, you need a qualified, regulated adviser, and ChatGPT should only be used as a general information tool.”
Riz Malik, Director at Southend-on-Sea-based R3 Wealth, is an AI sceptic when it comes to advice. He said: “If AI gets it wrong, and it regularly does, are you prepared to risk your financial future or wellbeing?
“By all means, AI can be a great place to start, but if you are making key financial decisions that could have an impact on you and your family, proceed with caution. What recourse do you have?”
Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said AI should be used to clarify, not to commit.
She added: “Using ChatGPT for financial advice is like asking a satnav to judge your driving. It’ll give you directions, but it won’t stop you crashing. AI can summarise, simplify and sometimes surprise you, but it cannot spot your stress levels, your spending habits or the skeletons in your credit file.
“The real risk is mistaking slick sentences for sound strategy. ChatGPT can be confident, convincing and completely wrong, and consumers are the ones left picking up the pieces. Use it to clarify, not to commit. When it comes to your money, you need wisdom, not wizardry.”
Stick to the professionals
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said it’s best to stick to professionals.
He continued: “Just like most topics, ChatGPT can give great opinions on financial advice. However so can Dave, down the pub. Also like Dave, ChatGPT can hallucinate.
“The problem is you don’t want someone investing your money who is seeing things. With issues as important as health, wealth and law, it’s probably best to stick to regulated professionals.”
Daniel Wiltshire, Actuary & IFA at Bradford-on-Avon-based Wiltshire Wealth, echoed the sentiment.
He said: “Using ChatGPT for financial advice is the modern equivalent to asking a bloke down the pub. It’s unqualified, unregulated and often unintelligible. It’s free but could end up costing you a lot of money.”
Photo by Elimende Inagella on Unsplash
