Accountants caution against a rise in Brits using AI for personal finance advice

West Midlands-based accountancy firm Prime Accountants is warning the public against the use of AI for personal finance advice.

Researchers have found that 40 per cent of Brits are using AI for advice with their personal finances.

While AI may have its benefits, using these platforms for financial advice is being cautioned against by accountants across the UK.

Paul Guise, a Director at Prime, said: “AI hallucinates so often. When a chatbot doesn’t know the facts, it would rather guess than admit it doesn’t know something.

“Generic AI platforms like ChatGPT have never been known for their accuracy. They are highly advanced statistical guessers, not financial wizards.”

It has been shown that chatbots regularly recall rules, such as ISA allowances, incorrectly, which can lead to costly breaches if users follow the advice directly.

Inputting personal financial data into chatbots to see what allowances you can access is almost always a dangerous game.

Paul said: “Using AI for your personal financial advice is not the best idea. Sharing personal financial information with operators like ChatGPT will always put your data at risk of a breach.

“Personal data like bank statements, pension details and National Insurance numbers should never be shared online unless it is going directly to an accountant.”

Another hidden trap of using AI for financial advice is that it offers no consumer protection.

If AI gives you a non-compliant tax plan, you have no right to get in contact with the Financial Ombudsman Service to offer you guidance on how to rectify the mistake.

This lack of human interaction when planning your tax with AI can lead to a host of issues.

Paul said: “AI simply does not understand the nuances of everyday life. It will always resort to ‘rational’ financial choices, which will completely ignore individual risk tolerance and personal goals.

“The algorithm of AI will unknowingly recommend financial products that do not fit into users’ personal tax plans and could negatively impact their finances.

“It is always best to get in contact with an accountant if you need advice with your tax or personal finances, not AI. After all, this is what we do for a living!”