ChatGPT has taken the world by storm. The artificial intelligence (AI) seems to have the answer for anything that anyone throws at it, from how to bake a cake to how to build a house. But when it comes to financial questions, ChatGPT can be something of a double-edged sword.
On the one hand, the AI does an exemplary job of compiling readily available information from the internet and assembling it in an easy-to-read, easy-to-follow format. On the other, the answers that ChatGPT provides are necessarily broad-based and general, and they may or may not apply to your specific financial situation.
However, there are other reasons that you might want to exercise caution when using ChatGPT to help with financial decisions. Read on to learn more.
ChatGPT’s Own Disclaimers
ChatGPT’s own developers offer a wide range of disclaimers about the AI’s performance, and that alone should be enough for users to take its advice with a grain of salt. In fact, if you ask ChatGPT about its own limitations, here is what it tells you:
- Lack of common sense
- Sensitivity to input phrasing
- Tendency to produce verbose responses
- Difficulty in handling ambiguous phrases
- Propensity to amplify biases
- Inability to engage in multi-turn conversations
- Limited access to up-do-date information
- Proneness to generating incorrect or misleading information
That alone should be enough to give pause to someone planning to rely on ChatGPT to provide them with important financial information. If your financial advisor told you that he or she “lacked common sense,” had “limited access to up-do-date information” and was prone to “generating incorrect or misleading information,” would you hire them? Probably not. This is something to keep in mind if you plan to rely on ChatGPT.
ChatGPT’s Lack of Personal Understanding
ChatGPT is excellent at compiling information and presenting it in an easily understandable manner. Some of its answers regarding financial matters are indeed quite useful.
For example, if you ask ChatGPT about how to save more money, it will give you fairly generic — but still useful — recommendations, such as “set goals,” “create a budget,” “reduce discretionary spending” and “automate savings.” Few would deny that those are helpful suggestions. They’re also pretty basic, though, and they don’t incorporate the specifics of your personal situation.
Maybe you already do all these things but need more specific advice, or perhaps your situation is about to change because you’re having a child or buying a house. Maybe you have a spouse that can pick up some extra work and solve your cash flow problem without having to make other changes. For most people, ChatGPT’s answers are helpful, but almost by definition they won’t apply to everyone.
Can ChatGPT Replace Your Financial Advisor?
If you ask ChatGPT if it can be your financial advisor, this is the AI’s response:
“I can provide you with some general information and guidance on financial matters, but please keep in mind that I am an AI language model and not a certified financial advisor. It’s always recommended to consult with a qualified financial professional who can consider your specific circumstances and provide personalized advice.”
That is actually a true and useful answer. ChatGPT can provide you with general information and guidance, but it can’t offer personalized advice. If you ask ChatGPT if it can pick stocks for you, it says that it “cannot offer personalized investment advice or pick specific stocks for you.” It then goes on to provide fairly generic investment advice, such as “conduct thorough research” and “diversify your portfolio.” Again, those suggestions are useful, but they can’t help you to construct a retirement portfolio, pick stocks or accomplish more advanced financial tasks.
So Is ChatGPT Useful for Financial Information or Not?
The bottom line is that ChatGPT can present you with financial information available on the internet without you having to search for it on your own. In some cases, this information can be very useful. If you don’t have the first idea about how to save money or invest, for example, ChatGPT can provide you with the very basics that you will need to get started.
However, by its own admission, ChatGPT’s information may be outdated, unreliable or even misleading and lacking common sense. If you’re planning on making financial decisions using ChatGPT, at the very least you should verify the information you read with a reliable source, such as a real-world financial advisor.
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