Is ChatGPT a good financial planner?

I’ve been thinking a lot about ChatGPT and its ability to disrupt the personal finance space. Will it replace the need to talk to a human about your finances? Can it create a personalized financial plan that takes into account the nuance of being a human and navigating our crazy economy?

To figure out the answer, I asked the free version of ChatGPT (version 3.5) to create a financial plan based on the below prompt:

p.s – I formulated my prompt this way because of an article I read from the decoder.

So…What did it say?

The first sentence is so humanlike it’s scary. Whoever “me” is, they sure sound convincing.

Strategy #1:

I agree with the chatbot about increasing retirement contributions. If you really want to retire as early as possible, one of the best ways to do so is to sock away as much as you can in your 401k and Roth IRA.

Strategy #2:

I’m not sold on this answer. It’s a bit too black and white for me, and I don’t always think that paying off student loans as quickly as possible is the way to go. I’ll dig into this more with the chatbot when I respond.

But first, here’s the rest of the answer:

Strategy #3:

I love that ChatGPT emphasized having an emergency fund. I think it’s the most important part of a financial plan and it needs to get more love and attention from people.

Strategy #4:

Also agree! I recently set up a separate savings account with an automatic monthly transfer to save toward a down payment. I like that the money is separate from my checking account so I’m not tempted to use it on other things.

Strategy #5:

Hmmm… I don’t know about this one. Refinancing can be great because of a lower interest rate, but it can also eliminate repayment and deferment options if you have federal student loans. This is another black and white answer that I think needs more nuance and explanation.

Wow – now this is something I can imagine a financial planner saying.

I did have questions, so here’s what I asked:

I don’t know why I said “thank you” to a chatbot, but it just felt right.

Here’s what ChatGPT said:

Now we’re talking

This is the kind of nuance I was looking for the first time around! I like how the chatbot included examples that help you determine whether each factor applies to your specific financial situation.

This response is less black and white, and more conversational – just like a human interaction would be.

The final recommendation

I couldn’t agree more. In this exchange, ChatGPT gave high-level financial guidance that is applicable to a large majority of people, which is great. However, I had to prompt the chatbot for more specific advice around student loan payments based on my specific goals.

If you seek financial guidance from a chatbot but don’t challenge the answers to see if they are right for your specific financial situation, the advice could do more harm than good.

Final Thoughts

ChatGPT is an amazing tool. Its research and synthesis capabilities can bring your ideas to life faster than ever before. It has the potential to change work-life balance forever – if it’s deployed with people, not profits in mind.

When it comes to making key financial decisions though…I’m not sure. A lot of financial guidance applies to most people, and ChatGPT does a great job offering that guidance.

But there are also individual circumstances and nuance that factor into what people do and why they do it. Having an intuitive, experienced human to help decipher what’s truly important to you is something that ChatGPT can’t replace – (Yet?).