Luke Jensen May 2, 2024 - 6 min read

Will AI control my money?

It’s become almost impossible to watch, listen or scroll recently without headlines about AI (Artificial Intelligence) and ChatGPT infiltrating every aspect of our lives. From “ChatGPT wrote my fitness plan”, to “AI is taking over the world”, the general consensus seems to come down to one word – controversial.

A language model developed by the company ‘OpenAI’, ChatGPT is designed to generate human-like responses with impressive speed by scraping the internet for data. The system uses this information to respond to prompts provided by the user, that can range from answering simple questions to producing complex code for websites.

As the developments with this kind of technology evolve, so do the concerns about its role in our everyday lives and the industries it will continue to impact – with financial advice being no exception. And whether you’re for or against AI, there’s no doubt that it’s changing the way we do things, and that it will continue to do so .

ChatGPT and financial advice

But what about the impact of software like ChatGPT on financial advice and investing? The Financial Review tested this functionality*, asking ChatGPT “How much tax is payable if you earn $250,000 a year with $40,000 tax deductions and should you make concessional super contributions?”

In response, the software automatically applied Australian resident tax rules for 2022-23 financial year (potentially learning this from previous prompts in the software) but calculated the marginal tax incorrectly, applying one marginal tax rate to the entire net income.

In addition, ChatGPT incorrectly stated a $25,000 concessional contribution cap to superannuation rather than the correct $27,500 contribution cap.

“Problematically, ChatGPT had no idea it was wrong. It gave these answers confidently – only someone who knew the correct answer could correct it. An investor relying on the data could be in trouble.” – Tim Mackay, Financial Review

However, when asked to provide the top 20 Australian Exchange-Traded Funds (ETFs) and links to their website, it was able to instantaneously provide the information (albeit, utilising some strategic prompts that asked the software to pretend it wasn’t actually ChatGPT to bypass its rules).

Although the software has the capacity to provide financial information in just seconds, it’s not always accurate. And we don’t always know the source of the information either. When you consider the frequency of changes to government legislation, the stringent regulations, and the abundance of historical information available on the internet, investors who elect to rely on this information may be exposed to the potential for detrimental outcomes.

Harnessing AI for good

ChatGPT does, however, have its place. Using ChatGPT for general enquiries, to improve financial literacy, to simplify complex information or even assist with budgeting plans, can provide an easily accessible and free tool to use in conjunction with a (human!) financial adviser.

Whilst it is early days for Artificial Intelligence, and history would suggest that technology will only improve over time, it remains hard to see a time when we can rely solely on technology alone to entrust our lifesavings. Although some advisers may use the software for certain aspects of their financial planning process, it cannot account for unexpected events or changes in the market. Human expertise and judgement remain essential in adapting to these shifts.

I also think one of the most important elements of good financial advice is understanding the client and knowing what questions to ask to help them realise what’s most important. I’m not sure ChatGPT is ready to be the one asking questions!



Should you have any questions on this topic, please feel free to contact us and we will happily assist you.