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People use chatbots for every type of advice possible these days – including money. The appeal is obvious: It’s cheaper than hiring a financial adviser, less onerous than consulting a know-it-all relative, and takes seconds. And chatbots sound like they know what they’re doing, right?
That last bit is actually the catch, writes Pawan Jain, a finance professor at the University of Michigan. Artificial intelligence is programmed to sound confident and authoritative, even when it’s not. And that confidence can lull users into complacency when they should be seeking out human advice, especially when it comes to money.
AI is “excellent for learning concepts, drafting questions and getting oriented before a meeting,” Jain writes. “But watch out for the signals that you have left its comfort zone and entered the territory where AI is weakest and a confident answer is least trustworthy.”
This is especially true the more specialized your questions – and the greater the stakes – become, according to Jain. Examples include estate matters, the drawdown of retirement savings and strategies for claiming Social Security benefits.
As Jain puts it: “On the hardest questions, that smooth confidence is exactly the signal that you should pick up the phone and talk to an expert.”
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