Millions Trust AI With Their Money. Should They?
Debt.com Editor, PFE
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More on our editorial policyWould you trust a product known for hallucinating facts to plan your finances? Well, more than half of Americans and Brits are. Whether that's helping them or hurting them depends a lot on who's asking, and how.
Research from MIT reveals generative AI is more popular for financial advice than human advisors. A second study, published in the Journal of Financial Planning, found that different AI tools gave meaningfully different answers to the exact same question, sometimes wildly different.
"GenAI-driven responses may sound confident but can still be incomplete, misleading, or incorrect," the Journal of Financial Planning paper says. "Without proper knowledge, poorly constructed prompts or misinterpretation of output could inadvertently lead clients toward financial strategies that are inconsistent with sound planning practice."
New tech, old strategy
People have a history of turning to the latest communications technology for free financial advice. And guess what: there's also a history of it not always being accurate or what's best for them.
Even focusing on recent history: Debt.com reported just a few years ago on the number turning to TikTok for financial advice.
One in-depth report, where we scoured the platform ourselves, led us to a category of influencers posting bite-sized clips promising instant riches, the kind of content we quoted from one creator in the headline "How to Be a Millionaire in 60 Seconds, Guaranteed!"
The story was enough to inspire Howard Dvorkin, Debt.com's founder and chairman, to launch an awards program recognizing the best financial advice on social media to help users distinguish honest content from over-sensational clickbait. What began in 2023 as the FinTok Awards is now the FinTalk Awards, with this year's nominees set to be announced August 10.
"FinTalk is shorthand for the financial professionals who have creatively manipulated a platform meant for entertainment and made it all about education," Dvorkin wrote of the awards in 2023, before the program was renamed FinTalk. "At first, I was skeptical that even the keenest money minds could cram credit-and-debt lessons into three-minute videos – and get TikTokers to watch them."
The key takeaway
There's good news: researchers found that following AI's financial advice generally pushes people toward smarter, more textbook-sound decisions over a lifetime, saving more, spending less recklessly, investing more sensibly.
And bad news: how good that advice is depends heavily on how you ask, who's asking, and which AI tool you happen to open.
Taha Choukhmane, the MIT Sloan finance professor who led the research, reached a conclusion that seems in line with Dvorkin's: the latest tech isn't necessarily a bad place to start, but it's a terrible place to finish making decisions that'll impact your financial future.
"Generative AI has real potential to improve access to financial advice and support better decision-making over a lifetime," said Choukhmane. "At the same time, its impact is not uniform."
A financial professional who knows you and your unique situation can give the best advice. An honest review of your budget, earnings, and goals is how to create the best plan for you.
If debts are holding you back from achieving your goals, call (855) 740-9831. There are solutions tailored to all kinds of debts. Specialists at Debt.com understand those solutions and take the initial consultation free of charge.
