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AI financial advice is surprisingly good, especially if you ask right questions

mitsloan.mit.edu

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Re: AI financial advice is surprisingly good, especially if you ask right questions

#111

Post by AussieWog93 »

bradfa wrote: post #104
AussieWog93 wrote: post #98

People in this thread are massively underestimating the level of financial illiteracy in the general population. We've had multiple people try to convince us to set up bank accounts for our kids, so that they could accumulate interest over 18 years. More that tried to convince me to gamble on random pump and dump shitcoins. More still that talked about "investing" in random collectables like Funko Pops or Pokemon car…

What’s wrong with bank accounts for your kids? Sorry, this one doesn’t seem to fit with your other examples.

The banks might pay 3% interest, whereas even non-volatile conservative investments like cap notes or bonds would pay something like 7%.

Plugging it into a calculator:

1.03 ^ 18 = 1.70

1.07 ^ 18 = 3.37

Example numbers, but you're effectively taking half of the money that your kid would have had on their 18th birthday, and giving it to a banker.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#112

Post by lostaccount »

bradfa wrote: post #104
AussieWog93 wrote: post #98

People in this thread are massively underestimating the level of financial illiteracy in the general population. We've had multiple people try to convince us to set up bank accounts for our kids, so that they could accumulate interest over 18 years. More that tried to convince me to gamble on random pump and dump shitcoins. More still that talked about "investing" in random collectables like Funko Pops or Pokemon car…

What’s wrong with bank accounts for your kids? Sorry, this one doesn’t seem to fit with your other examples.

Not OP, but I think they are referring to the fact that you can get tax advantaged accounts instead of a standard savings account. Not to mention the interest rate on those accounts is basically a rounding error.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#113

Post by ingvay7 »

networkOne wrote: post #25

Yes, financial planners will be one of the first industries to totally revamp itself because of AI. $2,000 for some SoA which is 99% boiler-plate? No thanks. I spent years in this industry, and the advice from these 'experts' is demonstrably poor.

This is spot on and has been my experience. The tax-efficiency and lot-selection work it can provide is easily more valuable than a human advisor charging $2,000 for boilerplate. However, I know my P&L best and it has to ride shotgun while I am making the final decisions and I should know the overall strategy — should i be 80/20, have this much tech concentration, will 8% hold, tax implications in my state etc.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#114

Post by hibikir »

AussieWog93 wrote: post #98

People in this thread are massively underestimating the level of financial illiteracy in the general population. We've had multiple people try to convince us to set up bank accounts for our kids, so that they could accumulate interest over 18 years. More that tried to convince me to gamble on random pump and dump shitcoins. More still that talked about "investing" in random collectables like Funko Pops or Pokemon car…

Yes, and that's from supposed professionals too, not just crazy youtubers or tiktok channels. My neighborhood has enough old people that Edward Jones reps come over to try to manage your money. So I get to ask them questions, and see they are basically offering to rip me off. And that's in the US: You should see the investment recommendations people in Spain get when they talk to supposed advisors in real banks. Search for the Preferential shares scandal, where banks had scripts teaching how to lie to people to sell a product that would prop up the bank while having great chances of wiping out the buyer's savings.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#115

Post by mikeocool »

mschild wrote: post #14
dmix wrote: post #5

I use YNAB ( https://www.ynab.com/ ) for budgeting so I already had all of my financial data in a single source. Exporting the CSVs locally and asking Claude to be my financial advisor legitimately gave me good advice. Not just nagging me to save more (which is always useful), but how to organize my budget categories better, detecting longer term spending patterns I wasn't thinking much about, researching credit card…

> Financial advisors and tax accountants Financial advisors giving generic advice, sure. Tax accountants though? I'd be careful. I know the mistakes that llms make when complexity gets involved (especially tax codes and laws) and frankly I don't know enough about them to be able to verify whether what I'm getting out of it makes sense. I could probably verify it with enough research but then I just could so it myself…

Yeah, Claude told me what a great idea converting my LLC to an S Corp would be and how much I would save in taxes. When I asked my accountant about he told me it would actually cost me more, because of NYC taxes S Corps.

I didn’t tell Claude I lived NYC, because it didn’t occur to me that it was relevant. I find tax stuff is full stuff like this (often more subtle than where you live).

Re: AI financial advice is surprisingly good, especially if you ask right questions

#116

Post by SpicyLemonZest »

malfist wrote: post #91
SpicyLemonZest wrote: post #64

Earlier quoted context omitted.

It's not helpful to the kind of person whose recreational weekend reading includes MIT Sloan analyses. Most Americans don't have what I suspect you'd consider a basic level of financial literacy ( https://www.nytimes.com/2026/06/12/your-money/americans-fina... ), and do need to be informed about things like the compounding effect of savings or the benefit of diversification.

Its also not helpful to the person who doesn't. How much to save, when to save, how to diversify, what rate of exposure to equities is too much, how much to with draw in retirement? And thats just questions on the answer it gave. But what about if I have a loan bearing interest? What about if I'm self employed? What if my appetite for risk is less, greater? What if I want to retire early? It gave vague unspecified ad…

[flagged]

Re: AI financial advice is surprisingly good, especially if you ask right questions

#117

Post by CliffyA »

bradfa wrote: post #104
AussieWog93 wrote: post #98

People in this thread are massively underestimating the level of financial illiteracy in the general population. We've had multiple people try to convince us to set up bank accounts for our kids, so that they could accumulate interest over 18 years. More that tried to convince me to gamble on random pump and dump shitcoins. More still that talked about "investing" in random collectables like Funko Pops or Pokemon car…

What’s wrong with bank accounts for your kids? Sorry, this one doesn’t seem to fit with your other examples.

As the OP has "Aussie" in their name I think they'd be referring to the Commonwealth Bank of Australia Dollarmites accounts. They were shutdown recently after a watchdog investigation. It was locking kids into using the bank that would continue into adulthood and schools were getting paid to sign kids up.

https://www.morningstar.com.au/personal-finance/the-lessons-...

"They found that it provided little value for children and the largest outcome was that children were being exposed to ‘sophisticated’ marketing tactics."

Re: AI financial advice is surprisingly good, especially if you ask right questions

#118

Post by [deleted] »

dagenix wrote: post #107
bradfa wrote: post #104

Earlier quoted context omitted.

What’s wrong with bank accounts for your kids? Sorry, this one doesn’t seem to fit with your other examples.

Bank account interest is pretty much always less than inflation. So, money sitting in a bank account for 18 years is just losing value.

[deleted]

Re: AI financial advice is surprisingly good, especially if you ask right questions

#119

Post by arjie »

The advice from most agents is very normie and really the normie advice is pretty good, right? It's just that that's what you get most of the time until you give enough specifics to be known not to be normie. And the problem is that it veers into technical analysis very easily.

Re: AI financial advice is surprisingly good, especially if you ask right questions

#120

Post by SpicyLemonZest »

malfist wrote: post #91
SpicyLemonZest wrote: post #64

Earlier quoted context omitted.

It's not helpful to the kind of person whose recreational weekend reading includes MIT Sloan analyses. Most Americans don't have what I suspect you'd consider a basic level of financial literacy ( https://www.nytimes.com/2026/06/12/your-money/americans-fina... ), and do need to be informed about things like the compounding effect of savings or the benefit of diversification.

Its also not helpful to the person who doesn't. How much to save, when to save, how to diversify, what rate of exposure to equities is too much, how much to with draw in retirement? And thats just questions on the answer it gave. But what about if I have a loan bearing interest? What about if I'm self employed? What if my appetite for risk is less, greater? What if I want to retire early? It gave vague unspecified ad…

Why do you think it gave vague advice? The paper has a sample of provided advice in Table 1 that seems pretty specific. (I attempted to quote it, but it triggers the HN spam filters, presumably because it's a chunk of LLM generated text substantially larger than my actual comment.)
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