Are AI Chatbots the Future of Financial Advice? Discover the Truth | PRIMENEWSNOW

AI: The New Financial Advisor?

In today’s digital age, many individuals are seeking financial guidance from artificial intelligence, ranging from budgeting tips to investment advice.

According to a recent survey by Intuit Credit Karma, financial advice is now the second most popular use for generative AI platforms, just after health and wellness.

The survey reveals that 66% of Americans have turned to AI for financial advice, with this figure climbing to 82% among Millennials and Gen Z.

Trusting AI with Your Finances

Before acting on AI-generated advice, experts emphasize understanding the potential risks involved.

Thomas Nitzsche from Money Management International compares AI chatbots to an advanced, interactive search engine.

“It’s a novel way to explore options,” Nitzsche explains. “I appreciate its empathetic approach and the follow-up questions it asks.”

About two-thirds of GenAI users frequently seek financial advice from AI, and three-quarters feel comfortable asking questions they might otherwise avoid.

Real-World Application and Caution

Over half of the survey participants admitted to making poor financial choices based on AI advice.

In a test scenario, we asked ChatGPT to create a budget for a mid-30s individual in Philadelphia with $25,000 in credit card debt, $8,000 monthly income, and $10,000 in expenses.

ChatGPT acknowledged the challenging situation and offered a “realistic” budget plan focused on debt reduction, expense management, and emergency fund creation.

It suggested specific spending cuts and recommended consulting a nonprofit credit counselor.

Nitzsche advises viewing GenAI as a guide rather than a definitive solution.

“It encourages taking the next step, which many clients struggle with due to decision paralysis,” he notes.

Limitations and Final Thoughts

However, Nitzsche warns that GenAI can provide incorrect information or suggest unreliable services. ChatGPT itself advises users to verify important details.

When asked about retirement investments, Google Gemini included a disclaimer urging consultation with a financial professional.

Nitzsche stresses the importance of thorough research.

“Always verify strategies with additional sources,” he advises.