Financial Life Planning

    Can you trust AI with your most valuable assets?

    Robert Wilcocks

    By , Founder, Quantum Life

    CISI Level 6 Advanced Financial Planning · Registered Life Planner®

    Published

    In short

    No. Researchers testing 18 AI models on more than 10,000 money questions found 57% of the answers contained an error or material omission, rising to 88% on complicated questions — and general-purpose AI tools are not regulated by the FCA. Use AI to become a better-informed client, not to be your adviser.

    I think AI is brilliant for plenty of things. I would not, however, use it for financial advice.

    The FT reported on an interesting experiment last week. Researchers tested 18 AI models on more than 10,000 questions about mortgages, pensions, tax, debt and savings. According to the company behind the research, 57% of the answers contained an error or material omission. On more complicated questions, that rose to 88%.

    One incorrect answer about pension tax could apparently have left someone with a £17,500 HMRC bill. Ouch.

    Editorial poster reading Can you trust AI with your most valuable assets?

    AI is still useful with money. Use it to understand the difference between an ISA and a pension, decipher jargon, or work out the questions you should be asking. Ask it about school fees inflation. But information and financial advice are very different things.

    The FCA found that 44% of less experienced investors aged 18 to 40 mistakenly believed financial information produced by AI was regulated. General-purpose AI tools aren’t regulated by the FCA, and you don’t have the protections you’d have if regulated advice went wrong.

    There’s also a more fundamental problem.

    Financial planning shouldn’t start with a question about your pension or your tax. It should start with your life.
    • What do you want the next ten, twenty or thirty years to look like?
    • When do you want to stop working?
    • Help the children now, or leave an inheritance later?
    • Sell the business, and for how much?
    • Should you spend more while you’re young enough to enjoy it?

    At Quantum Life, we start with life goals and work backwards from there.

    We look at your whole financial life because the individual decisions are connected. Your investments affect your retirement. Your retirement affects what you can give away. Tax affects both. Your business, property, estate and family circumstances add more moving parts.

    And sometimes the numbers aren’t even the difficult bit.

    A couple might have completely different ideas about retirement. A business owner might discover that their children don’t actually want the company they’ve spent 30 years planning to leave them. Someone who can comfortably afford to retire might still be terrified of spending the money.

    Good financial planning has to understand those things too.

    Now, I appreciate that a financial planner telling you AI can’t replace a financial planner is hardly the most impartial opinion you’ll read today. But the technology simply isn’t there yet.

    AI can find and explain information. What it can’t currently do is provide a regulated, holistic planning process that understands your life, works through the trade-offs with you and takes responsibility for the advice it gives.

    Perhaps one day it will.

    For now, I’d use AI to help you become a better-informed client.

    I wouldn’t ask it to be your adviser.

    Rob

    Frequently asked questions

    Can I use AI for financial advice?

    No. General-purpose AI tools are not regulated by the FCA, so you do not have the protections you would have if regulated advice went wrong. Researchers found 57% of AI answers to money questions contained an error or material omission, rising to 88% on more complicated questions.

    What did the research on AI and financial questions find?

    An experiment reported by the FT tested 18 AI models on more than 10,000 questions about mortgages, pensions, tax, debt and savings. 57% of the answers contained an error or material omission, and one incorrect answer about pension tax could have left someone with a £17,500 HMRC bill.

    What should I use AI for when it comes to money?

    Understanding the difference between an ISA and a pension, deciphering jargon, or working out the questions you should be asking. Information and financial advice are very different things — AI can find and explain information, but it cannot provide a regulated, holistic planning process that takes responsibility for the advice.

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