Artificial intelligence (AI) is rapidly becoming part of everyday life, from the apps we use on our phones to the recommendations we receive online. It can be useful for researching financial topics, but relying on it alone could put your plans at risk. Recent FCA research found that 44% of people surveyed mistakenly believed AI-generated financial information was regulated in the same way as advice from an authorised firm.
As AI continues to evolve, you may wonder what role it could play in helping you make financial decisions. Here are five reasons to treat AI guidance with caution.
1. AI will confidently give you the wrong answer most of the time
AI can produce answers that sound confident and convincing, even when they are incorrect, misleading or fabricated. Research has shown that on average, mistakes are made 57% of the time with the accuracy for hard questions being as low as 7%. A mistake in a restaurant recommendation may be inconvenient; an error involving pensions, investments, tax, inheritance planning or retirement income could have lasting consequences.
2. AI doesn’t know your complete financial picture
Good financial planning is more than just numbers and data. An adviser considers your family circumstances, goals, attitude to risk and future plans amongst other factors. AI only works with the details you provide and may not ask the follow-up questions that reveal what really matters. It cannot fully understand the wider context of your life like an adviser can.
3. AI isn’t regulated and isn’t accountable
AI tools do not provide regulated financial advice, owe you a duty of care or take responsibility if their guidance is unsuitable. If you rely on inaccurate information from an AI tool and lose money, you will generally be unable to complain to the Financial Ombudsman Service, as it normally deals with complaints about regulated financial businesses and certain other firms. By contrast, an authorised adviser operates within a regulated framework and is accountable for the advice you receive. When you financial future is at stake, that protection matters.
4. AI may not reflect the latest rules and regulations
Tax rules, legislation and regulation change over time. Some AI systems may rely on outdated information or misinterpret complex updates. A comparison of AI models found that some used out of date rules to form their responses or simply invented rules that don’t exist. Advisers continually monitor developments, apply professional judgement and consider how changes affect each client.
5. Financial decisions are emotional, not just mathematical
Financial planning is personal. During market volatility, uncertainty can prompt people to act too quickly, while over confidence can encourage excessive risk. A financial adviser can help you stay focused on long-term goals and make considered choices through retirement, bereavement, divorce or an inheritance. AI can analyse data, but it cannot replicate human understanding and reassurance.
How Origen uses AI responsibly
At Origen, we incorporate AI-powered technology within our financial planning processes by helping to analyse information and model different financial scenarios.
As we evolve our business, AI tools will become an increasingly important part of the process, however everything we do will always start and end with a human. Every personal recommendation we make is built and reviewed by a qualified financial adviser and checked by our Paraplanning and Business Quality teams before it reaches you. This combines AI’s efficiency with the personal understanding, accountability and expertise that personal financial planning requires.
The bottom line
AI can help you research financial topics and explore possibilities, but it cannot replace regulated advice. Your financial plans deserve advice based on your specific goals, circumstances and priorities, not algorithms alone.
AI may help you ask better questions. A trusted financial adviser can help you make better decisions.
CA13706 Exp 09/2027
