ChatGPT as financial adviser: reliable or not?

From budgeting to investment advice, AI seems to have an answer to everything. But this apparent intelligence is not without risk.

The numbers are impressive: according to a recent study, more than half of British people are using artificial intelligence to make financial decisions (source). The most popular themes? Investment research, debt management and pension planning. And the results look promising, as AI users estimate they've saved around £400 (€470) a year thanks to the insights they get.

There are no figures for Belgium, but many Belgians probably also use AI tools to help them budget, save or invest. Their appeal is understandable: while you can wait days to talk to an adviser and sometimes have to pay for this, ChatGPT, Claude or Mistral will give you a detailed answer in seconds. Available 24/7, no appointment necessary.

When AI starts hallucinating

However, all that glitters is not gold in the world of AI. A study has revealed that ChatGPT responds incorrectly or misleadingly to a third of financial questions (source). Although this study was conducted a year ago and newer models produce fewer hallucinations, this remains a major concern.

When the system is unsure of the answer, it might 'bluff' rather than admitting its ignorance. It then comes up with facts and sources that seem compelling, but that are disconnected from reality. If you ask a question about a company or a share that is not very well known, the chatbot will still offer you an answer. Is it better to disregard AI when it comes to your finances? Not necessarily. The key is to understand how to use AI correctly and its limitations.

How AI can really help you

AI excels at explaining simple financial concepts in clear language. Would you like to understand what an ETF is, the mechanism for compounding interest, or the difference between a bond and a share? AI will often be able to explain this more clearly than any financial encyclopaedia.

AI-powered chatbots are particularly effective at breaking down overly ambitious goals into small steps. If you want to save for a flat, an AI tool can suggest weekly or monthly steps and coach you throughout the process.

AI can also be useful for comparing the terms of several financial products. Think about the terms of mortgages, savings accounts or insurance, for example. AI will be able to sum up the features clearly - but it will always be up to you to check the details.

AI is also good at calculating scenarios. How would a rise in interest rates affect your savings plan? How much do you need to put aside every month to get a certain amount in ten years’ time? AI can quickly simulate different situations and compare the results.

AI as a financial adviser: security measures

1. Think of AI as a coach, not a decision-maker. Use it to understand concepts, not to make concrete investment decisions.

2. Never share personal data. Do not enter account numbers, specific amounts or other sensitive information. This is because AI platforms learn from the information you enter and you don't know where it’s stored or who might use it.

3. Always check sources. Ask the AI where it gets its information and make sure this means from official sites or public bodies, and remember to check that data are recent.

4. Be particularly sceptical of specific recommendations. If AI says “buy this share” or “this ETF is perfect for you”, don't take this at face value - AI doesn't know your full financial situation, goals and risk tolerance.

5. Use the latest models. Without being foolproof, newer models are less likely to hallucinate.

6. Specialised finance AI tools like Tendi, Origin, and Cleo are more reliable than generalist chatbots because they are trained with financial data. Nevertheless, these tools have the same fundamental limitations and risks.

The final analysis?

AI as a financial coach? It’s a double-edged sword: technology can broaden your financial knowledge, help you set financial goals and support you in preparing your decisions. But relying entirely on AI to make important financial choices is (still) too risky.

So use AI as an assistant, not as an adviser. Let it help you ask questions, understand concepts and evaluate different options. But actual decisions? It's better for you to take decisions yourself, with the help of qualified advisers who are responsible for the opinions they provide.

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