10 Risks of Asking ChatGPT for Money Advice

Around half of Americans surveyed (mostly Millenials and Gen-Zers) have turned to OpenAI’s now-famous AI chatbot, ChatGPT, for money advice. Some people have even acted on its advice to start budgeting, make new investments, or buy a house. 

Unfortunately, it’s easy to overestimate the abilities of such (admittedly fun) tools. 

Modern AI tools excel at processing, analyzing, and finding patterns in piles of data. AI chatbots in particular can hold realistic “conversations” or point your research in the right direction. But that’s where the AI money management ends. 

ChatGPT can only regurgitate information it’s been trained on and trawled the web for – and it only gives answers within the context you provide. 

Between that and AI’s inability to “think,” asking ChatGPT for money advice carries some risks. You’d be better off looking for an AI personal finance app.

Let’s explore how ChatGPT talks about money.

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1. ChatGPT is a generalist

ChatGPT is a language model and conversationalist – but it’s certainly no expert. (Though it did manage to pass the bar exam.) So, while the AI can provide some general ideas, it’s no certified financial anything. The ideas from ChatGPT are very high-level and are not personalized, so if you ask the bot, it wil remind you that personal finance is highly individual. What works for one person may not work for another.

Fortune highlighted the AI’s pitfalls when it pitted ChatGPT against a licensed professional. While the bot generated a lot of the same general advice, the expert ultimately provided greater understanding and accuracy. 

Plus, the expert could consider nuance and weigh the pros and cons of each decision, while ChatGPT couldn’t. 

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2. It doesn’t always know what you’re looking for (and neither do you!) 

ChatGPT can only give detailed, specific answers when you ask detailed, specific questions. But if you don’t know what you’re looking for, ChatGPT can’t guarantee a satisfying, accurate answer. And because it doesn’t think to ask for clarification, it’s not going to prod you for any “missing” information on its own. 

Of course, if you want to receive incomplete, incorrect, or just plain unsuitable money advice, that’s your choice! 

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3. Context matters – a lot 

To get personalized financial advice, you have to give a lot of personalized financial information. But ChatGPT can’t access your income, expenses, risk tolerance, and future goals the way an AI personal finance app might be able to.

ChatGPT also can’t anticipate potential future changes or comprehensively monitor the state of the economy, stock market, housing market, inflation, interest rates…you get the idea. 

In other words: personal finance is personal. And without nuanced information about your situation, ChatGPT has limited AI money management capabilities. Some of the advice may not actually apply to your situation. 

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4. Want up-to-date information? That’ll be $20, please

One massive downside of ChatGPT stems from its learning model. 

Unless you pay $20 per month, ChatGPT doesn’t have access to the internet. That means it only “knows” information up to its last update – which, as of this writing, means it has no idea what’s happened before 2022. It also costs more than most AI personal finance apps available. 

That makes the AI effectively useless when it comes to reacting to current events. So much for quality, timely financial advice! 

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5. AI struggles with biases

Like other AI tools, ChatGPT has been known to spit out biases learned from its training data. Users have reported receiving problematic, charged, or untrue statements surrounding sensitive topics like race, ethnicity, and gender. 

That’s upsetting enough on its own. But the AI may also apply these biases when answering highly personal questions, impacting the quality or outcomes of its advice. 

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6. ChatGPT can’t reason – or cite its sources 

ChatGPT can generate complex, often impressive responses. But that doesn’t give it the ability to actually understand its answers. It may struggle in conversations that require logical reasoning, critical thinking, or nuance – you know, like your personal finances. 

And, like most language models, ChatGPT has limited ability to explain why it gives the answers it does or cite specific sources. If you’re trying to rely on AI money management to guide you, you’re mostly left in the dark.

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7. Sometimes, it’s just wrong

Currently, there’s no one library of truth that generative AI models learn from. Instead, they may trawl the web or be fed hand-selected data sets by their engineers. 

Unfortunately, it’s possible for AI to swallow sometimes-conflicting or false data that it regurgitates to users. So, while humans can check themselves against regulations, truth, and common sense, AI can’t. 

Sometimes, that means ChatGPT just misses nuance when answering complex questions. Other times, it just downright “lies.”  

So, even if you get what sounds like good AI money management from ChatGPT, you should still fact-check every detail with a more reputable source. 

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8. It admits it’s not always correct

You’ve gotta respect someone who tells you they may be wrong. 

OpenAI prompts ChatGPT to give a variety of warnings regarding its advice. If you’ve used the AI, you’ve probably seen the notice that ChatGPT “writes plausible-sounding but incorrect or nonsensical answers.”

And if you ask for financial advice, the AI will tell you that it can’t pick stocks, give personalized advice, or recommend consulting with a qualified professional to receive a personal touch. 

In other words, ChatGPT knows it’s not its AI money management capabilities are not quite suitable for sorting out your finances. And for once, you should take it at its word.  

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 9. Potential cybersecurity concerns 

While it’s possible to generate potentially more accurate answers by feeding ChatGPT your personal financial information, doing so comes at a risk. 

ChatGPT uses its conversations with users to continually learn, train, and find weak points in its “logic.” And though OpenAI implements strict security measures, it doesn’t necessarily have the same duty of care to protect your personal inputs. 

In other words: don’t tell it your Social Security or banking information – there’s no guarantee it’ll keep it a secret. 

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10. Bad financial advice can have a negative compounding effect

So this one isn't specific to ChatGPT per se, but hopefully by now we've made the case that ChatGPT might not always give the best financial advice. In the short run, you might not feel it, but personal finance is often about the long game.

If you're paying high fees for your investments or not saving enough for retirement each month, it could cost you hundreds of thousands of dollars over the next 30 to 40 years.

That means it's vital to get sound money advice early on. Even if the advice is 90% correct, even a few errors could become a big headache later.

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An AI that knows you 

Through this entire article, we’ve discovered that ChatGPT is incredibly general and occasionally flat-out wrong. Compare that to an AI service with a personal touch like Cleo, and it’s easy to see the difference. 

Cleo is an AI personal finance app that gives advice – and roasts you – based on its intimate knowledge of your finances. As a secure fintech tool, she’s designed to handle all kinds of personal information and draw more specific conclusions. 

Cleo also has human eyeballs in the background monitoring her function to ensure she always gives timely, intelligent recommendations and advice. 

Plus, her insults are 🔥. 

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