Should You Trust AI for Financial Information?

Maybe you use artificial intelligence (AI) to summarize your emails, organize your routines or help you learn a language. Artificial intelligence can be a powerful tool, and improvements and upgrades are rolling out all the time. But is it the right tool for helping manage your personal finances? Here's a few important things to consider when it comes to making decisions using AI and when you should rely on a financial professional instead.  

If you want to work with a professional who will help you build a financial plan personalized to you, talk to Farm Bureau.

Consider the Stakes

If you try an AI-generated recipe that doesn’t work out and you ruin dinner, the stakes are low. Maybe you order a pizza, or you pour yourself a bowl of cereal. If you turn to AI for financial planning, the stakes are much higher. False information or mistakes could cost you thousands of dollars and jeopardize your future. 

AI Can Make Mistakes and Ignore the Rules

AI can sometimes generate responses that aren’t fully accurate. When you use AI for financial analysis, it’s important to remember that its responses may not always reflect industry regulation or professional standards. Because AI learns from large amounts of data, much of it coming from internet sources that vary in quality, AI may produce answers that sound correct even when they’re not and may not always align with best practices or ethical considerations. If you’re using AI for financial planning, make sure to vet the information you get before you act on it. 

Use Smarter Prompts to Get Better Responses

Though you may not want to rely on it for advice, AI can help you learn and understand more about finance. For example, you may want to ask questions like:

• What are the benefits and risks of exchange traded funds?
• How does a CD ladder work?
• What are common financial goals for people in their 30s?
• What are the pros and cons of a health savings account (HSA)?
• What is the 4% rule for retirement withdrawals?

You can ask AI follow-up questions to get more clarification or detailed information, and then you can use what you learn to make better decisions about your finances. It’s important to make those decisions yourself or with the help of a financial professional.  

Think Twice Before Asking AI for Investment Advice

AI can help you build your financial education so you can make more informed decisions, however it’s not a good idea to ask AI personalized questions – such as which stocks to invest in or what cryptocurrency is best. Those choices depend on your unique financial goals, your risk tolerance or financial situation. 

AI Doesn’t Know You

You can include plenty of information in your AI prompts, but it still won’t truly understand your hopes, goals and worries. It can’t connect with you the way a human can. Another best practice when using AI for any reason – especially financial – is to not input personal information such as bank information, addresses, or birth dates. AI sessions are saved indefinitely and can be accessed by third-parties, increasing the risk of data breaches. 

Get Guidance From a Professional 

If you’re turning to AI for financial support, be sure to verify the information you get is accurate before you act on it. Farm Bureau can help you review your data and build a plan for your future. Find an agent who will consider your goals, dreams, concerns, finances and personal situation as part of your overall plan and get you started on the right foot.