Lately, we’ve been hearing a similar question come up in conversations:
If AI can answer almost anything, why not use it for financial advice too?
Tools like ChatGPT make it easier than ever to get quick answers, explore ideas, and learn about different strategies. For many people, that’s a helpful starting point.
At the same time, most financial decisions don’t exist in isolation. Choices around saving, investing, debt, and taxes tend to overlap, and the right direction often depends on how those pieces fit together in your situation.
In our new video, we talk through how people are using AI today, where it can be useful, and where having a broader perspective can make a difference.
If you’ve been exploring these tools yourself, we think you’ll find the conversation helpful.
If anything in the video sparks a question about your own accounts, please give us a call. We’re always happy to walk through the details with you (785) 340-3434.
Transcript
Can’t I Just Use AI for My Finances?
Matt: It feels like recently I hear a lot of people talking about, “Why do we even need financial advisors? Why don’t I just go and ask ChatGPT?” And usually it’s right after they use it to plan a vacation, maybe update their resume, or figure out what to cook for dinner.
Brigham: And, you know, the appeal is it’s quick, easy, gets you a fast response without putting in a lot of effort. It’s like a Google search but better and more in-depth.
So today we thought we’d talk about why AI has its place where it is right now and how that plays into the financial advising world and where and how we use it and how it works best in coordination with your financial advisor.
All right, Matt. So what type of questions are clients or friends asking you about how AI can be used for financial advice?
Matt: Yeah, I think a lot of common ones would be, “Am I saving enough? Am I able to retire? Do I have enough to purchase this house? What should I be investing in?” They kind of just want some really kind of quick, straightforward answers typically.
Where AI Can Help With Financial Planning Questions
Brigham: Okay. That makes sense. And to be fair, where does AI actually do a good job in answering those questions? I know that, you know, it can be somewhat in-depth for some of those answers.
What do you see AI doing a good job with?
Matt: Yeah, I think it does a good job at just kind of breaking down complex topics into a simple, kind of easy-to-understand way. You know, sometimes people just don’t even know where to start, so this can kind of help them get a starting point on kind of what to be thinking about with various financial topics. You know, it’s good for rules of thumb and just kind of, I’d say, basic education on topics for sure.
Why AI Financial Advice May Miss Personal Context
Matt: So let me ask you this: where do you see people getting into trouble with regards to using AI and some financial decision-making?
Brigham: So I’d say the biggest thing that I see and when we think about the term “personal financial planning” is the personal aspect. When you ask an AI agent a question about, you know, “Should I max out my 401(k)?” or “Should I be able to afford this home?” it’s going to give you generic advice tailored off of the masses and leave out individual pieces of your situation that could be important to answering the question. Like how your tax situation is impacted from maxing out your 401(k) or how the home purchase might leave you strapped for cash in some areas, while even though on paper it was affordable.
Simple Financial Questions Can Be More Complex Than They Seem
Matt: So what are some questions people might ask that sound simple but often could be really a little bit more complex?
Brigham: To dive more into the details, kind of what I’ve just talked about, say someone asks, “How much should I contribute to save for retirement each year?” You could get a generic answer like “Max out your 401(k)” or “Try to save 15 to 20% of your annual income.” Things that that doesn’t account for, say, career trajectory. Maybe this year you’re going to be making less money than you are next year and you really need to kind of use some of that cash to survive, to live on this year, when next year, you could put down a larger chunk or deposit into your account.
AI is not going to know unless you continue to use it and prompt it to get down to those, you know, little ingredients that make up a big portion of your plan. And so that’s why pairing the advice with a financial planner is really important.
How One Financial Decision Can Affect Your Bigger Picture
Matt: Yeah, I think often AI, again, like you said, overlooks a lot of things. Impact to cash flow, impact to your tax situation. And again, that’s just kind of on the 401(k) front, but that really kind of goes across the board with a lot of the questions that we often are going to these tools for, is not seeing how all the other areas of our financial lives are really tying together with maybe this one decision we’re thinking about making or not.
Another question that I see a lot of people going to AI with is, “Should I be investing or should I be accelerating and trying to pay down debt faster?” AI might give you kind of a straight-math answer, but the straight-math answer isn’t always the best choice, right? There’s a lot of things to factor in, such as just stress on your overall cash flow, your personal comfort level with debt.
Again, there’s just kind of these competing factors that need to be explored and talked through to determine kind of what’s the best decision for you. It’s not just such a blanket answer and always coming down to the kind of that math side or what the AI would give you.
Brigham: Yeah, I think that makes sense.
Financial Planning Areas That Need a Human Element
Brigham: And, you know, especially younger generations using that, it’s nice to be able to just get that quick information. But to your point, there’s just so many pieces that can be overlooked, especially when you’re just starting out in your financial journey.
Matt: So what would you say are some of the areas of financial planning that really need that human element?
Brigham: Yeah, and I think there are some of the most important pieces of what we do.
So talking through life changes, you know, big life events like the passing of a loved one, changing jobs, selling your home. Those are big pieces that help to have not only an emotional connection with your financial advisor, but just having a person that you know you can go to for that solid advice when thinking about investment returns.
Why Human Guidance Can Matter During Market Volatility
Brigham: So we’ve been on a bit of a roller-coaster ride with the stock market here recently. Having somebody that can keep you grounded, keep you on path for your financial plan is really important. You know, AI isn’t necessarily going to be that grounded source because it is a positive-looking feature.
Most of these AI agents will say, you know, things are going to be okay if you do this and this when maybe that’s not what works for you. So it’s really good to just have that personal and emotional connection with another human financial advisor.
Matt: Yeah, I think there’s so many emotions tied into all, you know, the financial decision-making that we’re doing throughout our lives, especially around some of those big life transitions and just having someone kind of in your corner to be able to navigate those conversations with. And then again, kind of see how all the different pieces, moving pieces tie together can certainly be helpful.
And, yeah, to your point on the investment returns, you can find opinions online for anything that you want, whether you think it’s going to be good, whether you think it’s going to be bad, seeing a trusted professional and being able to kind of talk through any concerns or fears that you might have related to the markets is a really good resource to have.
How to Use AI Without Becoming Over-Reliant on It
Matt: So how do you think someone should practically use AI without becoming over-reliant on it or just kind of being all in on using it to help them make decisions?
Brigham: I think it’s a great place to start to get educated about not only financial advice, but maybe some of the things that you’re looking to uncover about your own situation. So using it to generate question prompts to bring to your advisor that you think would be, you know, tailored to your situation.
I’ve seen that in use in practice before and it really does help. I also think, you know, using it not only as a one-time source, but as a, just kind of a backbone if you don’t have anywhere else to turn. I do think it’s good for, you know, just general basic questions if you’re looking for that.
But I think it’s important that we remember that financial planning is not a one-time process. It is an ongoing, tailored relationship that AI right now just doesn’t have the capabilities to provide.
Matt: I completely agree.
AI As a Starting Point for Financial Conversations
Matt: I think AI does a good job of giving blanket financial advice, but working with professionals where the personal financial planning really comes into play, being able to, again, understand your goals, objectives, your fears, your concerns, and understanding kind of how that all plays into all the financial decision-making that you’re trying to do throughout the course of your career and into retirement.
AI can be a really useful tool and it can be a great starting spot, especially if you’re starting to kind of get serious about your financial decision-making, but at some point theorizing on how you’re gonna make those decisions becomes real life. It doesn’t always fit so nice and neat into just a singular prompt or a formula.
And that’s when having a conversation with a professional really starts to make a lot more sense and that’s when you can have the ability to ask more follow-up questions and see “How are these decisions impacting kind of my overall financial picture?”
So keep using those tools, keep asking questions, and if you ever want any help sorting through how all those pieces fit together, we would be happy to chat with you.