Investing is a tricky subject, and if you find talk of index funds, equities, and compound interest rather confusing, then, this being the year 2025, you may well be tempted to turn to Artificial Intelligence for help.
In fact, research from Fidelity International suggests that 25% of Gen Z and millennials are using AI to learn about investing.
It’s easy to see why – nowadays, AI Large Language Models like ChatGPT are being used for all manner of tasks, from sifting through data to diet advice and therapy to video creation.
However, ChatGPT may be getting up to one-in-three financial questions wrong.
That’s according to broker analysis site Investing In The Web, which asked 100 personal finance questions such as ‘How do I save for my child’s education?’ and ‘What are the pros and cons of investing in gold?’.
How accurate is ChatGPT’s investment advice?
A panel of experts reviewed the responses and found 65% were accurate. But 29% were incomplete or misleading, while 6% were flat-out wrong.
And it’s not just ChatGPT.
Many Google searches show an AI-generated ‘overview’ at the top of the results page. A study by financial services digital agency Indulge found a quarter of these summaries for common finance queries were inaccurate.
Ironically, Indulge used ChatGPT’s latest model to fact-check each Google overview. Phase two of the study will involve human experts weighing in.
Paul Wood, the director overseeing this research, is not impressed. ‘Anything less than 100 per cent accuracy is, in my view, a failure of the system,’ he says.
So why is generative AI often wide of the mark? It depends entirely on the prompts it is given and the data it is trained on, both of which can be flawed or outdated. It rarely shows its workings or sources.
And, to put it bluntly, ChatGPT is designed to sound polished and plausible.
Too often, it resembles a smooth-talking chancer trying to blag their way through a job interview. To be fair, humans don’t have a spotless record here, either. The Financial Ombudsman received 1,459 complaints about financial advisers last year and upheld 57% of those relating to misselling or suitability of advice, which made up the most complaints. That’s a tiny proportion of the hundreds of thousands it receives about the wider financial industry, but still.
How to invest responsibly
Investing can be a confusing subject for anyone who hasn’t done it before. However, there are some key principles you can keep in mind when embarking on your investment journey that will help keep you on the right track and avoid potential pitfalls.
Understand your risk tolerance
The first step any advisor will ask you to take before investing is to determine your risk tolerance (how comfortable you are with ups and downs) and risk capacity (how much loss you could realistically afford without derailing your plans).
Investments of any kind will fluctuate in value, rising and falling, and you should factor this into your financial planning.
Before investing, aim to keep 3–6 months of essential expenses in an easy-access savings account so you’re not forced to sell investments in a downturn.
Your age, financial situation, and even family set-up or dependents may have an influence on your attitude to risk.
Use a reputable FCA-authorised platform
If you are looking to trade individual stocks and shares, using a reputable platform that is FCA-authorised is absolutely essential.
If an FCA-authorised firm fails and can’t return your assets, the FSCS may compensate up to £85,000 per person, per firm for eligible claims – though this does not protect against normal market losses.
Platforms like Trading212 let you manage assets from your phone or computer without needing a traditional broker. It can also help you track market trends in real time and manage your investments conveniently in one place.
As a new investor, it may also be worth considering diversified funds and ETFs.
Do your research
If you’re completely new to investing, it’s absolutely essential that you take some time to learn about what you are about to do. Start with the basics – learn about shares, bonds, funds, gilts, ISAs, and more.
Always source your information from reputable sources—for example, MoneySavingExpert provides a great guide for first-time investors.
Remember, it may well be worth seeking professional advice about your investments from independent financial advisers (who advise on the whole market) or restricted advisers who only advise on a limited range of products or providers.
However, to ensure you receive regulated advice, you should only use individuals authorised by the Financial Conduct Authority (FCA).
This information is for general guidance only and does not constitute personal financial advice. If you’re unsure, consider speaking to a qualified financial adviser
For most people, professional advice simply isn’t accessible. According to a poll by asset-management giant Schroders, three-quarters of advisers won’t take on clients with less than £50,000 to invest. It’s because advisers typically charge a percentage fee and smaller pots aren’t worth their while.
Meanwhile, banks and pension providers can’t offer straightforward guidance about your money because they’re not regulated to give advice. So is it any wonder AI is stepping in?
The financial sector knows it has to catch up. The Financial Conduct Authority is changing the rules to allow more firms to offer ‘targeted support’, sometimes via AI. For example, it wants pension funds to be able warn a customer if they are drawing down money from their nest egg too quickly and investors to be told if cheaper funds are available.
A senior figure at a major financial firm recently told me about a customer who held their pension and bank account with it. When they tried to cash in their retirement pot, staff spotted regular gambling activity on their statements. Instead of waving it through, the firm urged the customer to seek help.
Some financial advisers are automating admin tasks to cut costs and serve more clients, including those with less money. Octopus Money blends AI-generated suggestions – via a proprietary algorithm – with human money-coaches.
Other tools, such as specialised chatbots, can analyse your finances and tell you where you’re going right – or wrong. Take Cleo – it offers two tones: ‘hype mode’ praises your good behaviour while ‘roast mode’ gives you a playful telling-off and might say ‘here are the companies that are bleeding you dry’.
Apparently, most of Cleo’s seven million users prefer roast mode. Maybe we all know deep down that financial tough love can go a long way.
Which brings us back to ChatGPT, infamous for telling you your ideas are brilliant. To avoid its pitfalls, give it as much detail as possible in your prompt.
Always ask for sources and remember that its answers may not be current or relevant to the UK, along with checking privacy settings if you’re concerned about data being used to train future models.
Most importantly, don’t treat its advice as gospel.
Specialist financial AI could be a game-changer. But right now? I’m not sure I want the robot equivalent of Del Boy handling my investments – do you?
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