Lynda Moore says AI can be useful in dealing with money issues. But realise AI answers the question you ask. A good adviser listens for the real issues hiding behind it

These days it seems AI has a hand in just about everything. I will admit, I was a very reluctant user, that is, until I wanted to know if my chocolate brownie recipe could be made a bit healthier, without losing that lovely brownie texture, and it seems it can. Now, I happily chat to AI about Jett’s health, which muzzle to buy (so he doesn’t eat anything else he shouldn’t) as well as researching where to buy the muzzle. It’s also been very helpful in finding knitting patterns for the Fish and Chip baby top that Mum wanted to make. 

I have friends that ask AI to write the shopping list, plan Tuesday's dinner around whatever is wilting in the fridge (a very handy thing to know) and polish the email you've been putting off for a week. Before long it'll probably be offering opinions on how you load the dishwasher. So, it's hardly surprising that people are starting to ask it about their money. Questions like "should I pay off the mortgage faster?" and "what on earth is a growth fund?" are being typed into ChatGPT late at night, and honestly, I'm all for it.

Anything that gets people more curious about their own finances gets a cheer from me. If AI helps more people feel brave enough to join the conversation about money, that's a lovely thing. But like any new friend who seems to know everything, it's worth getting to know its quirks before you trust it with the big stuff.

Where AI is genuinely handy

AI is wonderful for getting the lay of the land and doing some research for you.  As I said to a friend of mine recently, who was also a reluctant adopter, it’s like having a huge bookcase, it would take days or weeks for us to read them all and find what we want, AI, can read all the books and find what we are looking for in a few seconds!  Say you're comparing a conservative KiwiSaver fund with a balanced one or wondering how a term deposit differs from a managed fund. A good question will get you a tidy summary faster than you can make a cup of tea, I know, I’ve tried it. You could find the same information by trawling through a dozen websites, but life is short and there are better uses for a Sunday afternoon. It's a low-pressure way to warm up before any real decisions get made.

It's also the most patient tutor you'll ever meet. You can ask what a PIE fund is, what your prescribed investor rate means, or how compound interest works. Then you can ask again, and again, and it will never once raise an eyebrow. That matters more than people realise, because embarrassment stops a lot of us from asking the basics. AI can even play the role of a friendly second opinion, helping you check what you've been told and turn up to your next appointment with sharper questions.

Where it can get a bit wobbly

You've probably heard the saying "rubbish in, rubbish out", and it applies here with bells on. Ask a fuzzy question and you'll often get an answer delivered with the confidence of someone giving directions in a town they've never visited. AI very rarely says "I'm not sure", which is charming in a dinner guest and less charming when your finances are involved. A small gap in what you tell it can turn into a surprisingly large gap in what it tells you.

One client asked AI to build a budget for them, they diligently feed in all their information (which did concern me a little) and got a wonderful report back.  When I looked at it, it was obvious to me, that one small piece of missing information had skewed the whole report, my client forgot to mention they were self-employed so had to save for tax.  No wonder they had such a healthy surplus each month. 

It also gets muddled when similar ideas are sitting next to each other. It might cheerfully mix up your PIR and your marginal tax rate or treat assets in a family trust as if they were relationship property. These sound like fussy little details, but they come with different tax treatment and very different consequences. In my relationship property work, those fussy details are often the whole story. Much of what these tools learned also comes from overseas, so don't be surprised if it starts talking about a 401(k) as though you'll find one down at your local bank. Researchers have also found that AI can carry biases around age, gender and background, which isn't ideal in something that sounds so sure of itself.

What it can't do (yet, but maybe coming)

Professor David Krueger, whose work shapes much of how I practise, talks about the money stories we all carry around. These are the beliefs and habits we picked up long ago, often at the kitchen table as kids, and they tend to steer our decisions far more than any spreadsheet does. AI answers the question you type. A good adviser listens for the question hiding behind it. Someone asking, "should I sell my shares?" might really be asking "are we going to be alright?", and that one deserves a real person and possibly a biscuit.

Then there's accountability, which is a bit like having a walking buddy. Most of us know roughly what we should be doing with our money, in the same way we know we should be stretching more. What makes the difference is knowing someone will ask how it's going. A chatbot won't notice if you go quiet for six months, and it certainly won't give you a gentle nudge. 

By all means, invite AI to the table. Let it help you learn, prepare and feel a little more confident, then bring that confidence into a proper conversation with a human. It's also perfectly fair to ask your adviser whether they use AI themselves, and how. Plenty do, and sensibly so, and you're entitled to know how it fits into the advice you're getting.

If you've been chatting with a chatbot about your money and fancy talking it through with a real person, there are lots of out there with the calculator’s ready to go, and the kettle is always on.

*Lynda Moore is a Money Mentalist coach and New Zealand’s only certified New Money Story® mentor. Lynda helps you understand why you do the things you do with your money, when we all know we should spend less than we earn. You can contact her here.