09/05/2026
🚨We are all increasingly turning to AI models to seek financial advice. Here are the key risks to watch out for:
No legal safety net - AI is not a licensed financial adviser. If its advice is wrong, investors generally do not have the same consumer protections or compensation rights they may have when dealing with a licensed adviser. Use AI for education and research, but rely on qualified advisers for major financial decisions.
Incorrect calculations - AI can produce materially wrong projections. Always cross-check AI outputs against trusted calculators, official sources, super funds, ASIC, ATO guidance and product documents.
Missing personal context - AI may overlook important details such as tax position, debt, family needs, insurance, liquidity requirements, risk tolerance and retirement goals. This can make its advice too generic. Manage this by treating AI as a starting point and asking what assumptions or missing information could change the recommendation.
Bias reinforcement - AI can sound confident and may reinforce the investor’s existing views, especially when they are already interested in high-risk investments such as cryptocurrency or speculative shares. To manage this, ask AI for the bear case, key risks, contrary evidence and reasons why the idea may fail before acting.
Privacy and security risk - using AI for budgeting or financial planning may require entering sensitive information such as income, expenses, account balances or transaction data. This creates privacy and data-security risks. Avoid entering identifiable personal details. Use anonymised data wherever possible.
