AI chatbots are offering financial advice. Should you trust them?

Filed 1w ago · Via NPR · The Buffoon Desk

THIS STORY IS SCORED

Bye Bye Brain

Alexander Nakarada · creatorchords.com · CC BY 4.0

Photo: Agnieszka Kwiecień, Nova · CC BY-SA 4.0 · via Wikimedia Commons

A JD Power survey of 4,000 people found 40% had used AI in the prior three months to manage finances, with over a third finding it as helpful as bank advice. An Ohio IT manager described using ChatGPT, which he calls 'Chatty,' for questions ranging from home equity decisions to retirement contributions.

MIT researchers found AI generally nudges people toward saving more and investing, and that simulated lifetime outcomes improved when advice was followed. But the same study found AI gave overly harsh spending advice after simulated job loss, poor portfolio-rebalancing guidance, and riskier suggestions to men than women.

A financial planner testing an AI model got a confident answer to incorporate as an S-corp, only to have it reverse itself into recommending an LLC once given more information. Wealth advisers say AI can hallucinate sources and tends toward sycophancy, telling users what they want to hear rather than what's accurate.

The full dispatch is available from the source below.

✒ FROM THE EDITORIAL DESK

An engine that confidently reverses its own legal advice mid-conversation is not a financial adviser, it's a very well-read coin flip with better manners. The people most at risk are exactly the ones without the background knowledge to catch it lying to their face.

Source: Read the original at NPR → Scored: Bye Bye Brain · Alexander Nakarada · CC BY 4.0

Read it scored.

Every story, every clown, every kazoo — in your pocket. Music plays automatically. Regret is optional.

GET IT ON iOS GET IT ON ANDROID