THE SILENT EPIDEMIC IN MY OFFICE
Last Tuesday, a 26-year-old walked into my office with her phone in hand and a mix of pride and panic in her eyes. “I asked ChatGPT to build me an investment portfolio,” she said, sliding her screen across my desk. “But my account is down 18% in three months.”
I see this pattern almost daily now. Young professionals—smart, motivated, educated—showing me financial plans generated by AI with the same confidence they’d bring a document from a CPA. Except there’s one critical difference: the AI has no license, no liability, and no way to understand what it doesn’t know.
This isn’t about bashing technology. After 15 years in banking, I’ve seen innovation revolutionize our industry. But what’s happening right now is different. It’s quieter. More dangerous. And it’s costing my clients—and likely millions of young Americans—real money.
THE NUMBERS DON’T LIE (BUT AI SOMETIMES DOES)
Here’s what we know: 82% of Gen Z and millennials are turning to AI for financial guidance. That’s not just casual curiosity—they’re making real decisions based on these recommendations. According to recent data, over half have made poor financial decisions as a result, and 19% have lost $100 or more following AI-generated advice. For Gen Z specifically, that number jumps to 27%.
Think about that. More than one in four young people have lost money—money they couldn’t afford to lose—because an algorithm gave them advice it wasn’t equipped to give.
But here’s the part that keeps me up at night: AI financial advice gets things wrong about 35% of the time. And of those errors, one-third are complete fabrications—what engineers call “hallucinations.” The AI doesn’t know it’s wrong. It presents fiction with the same confidence it presents fact.
I’ve seen it firsthand. Clients have brought me ChatGPT-generated tax strategies that would trigger audits, investment allocations that ignore their actual risk tolerance, and debt payoff plans that calculate interest incorrectly.
WHY THEY’RE TURNING TO CHATGPT (AND WHY I GET IT)
Before we go further, let’s be honest about why this is happening. Three-quarters of AI users say it lets them ask financial questions they’re too embarrassed to ask a human. I respect that. Money shame is real, and traditional finance hasn’t always been welcoming.
Professional financial advice is expensive—or at least it’s perceived that way. A young person making $45,000 a year doesn’t think they can afford a financial advisor. So they turn to something free, instant, and judgment-free.
I get it. I really do.
But here’s what I wish they knew: “Free” advice that costs you thousands in mistakes isn’t actually free. And “instant” answers that send you down the wrong path for years aren’t actually helpful.
THE 5 CRITICAL MISTAKES I SEE EVERY WEEK
After reviewing dozens of AI-generated financial plans, I’ve identified five patterns that keep appearing—mistakes that range from inconvenient to financially devastating.
Mistake 1: The Outdated Information Trap
AI models are trained on historical data, which means they’re often working with information that’s months or even years old. I had a client in March 2025 who asked ChatGPT about mortgage rates. The AI told her to expect rates around 3-4%—the reality was closer to 7%. That difference would have cost her $400 more per month if she’d moved forward without checking.
The fundamental principle of financial planning hasn’t changed in 15 years: you need accurate data. But the strategy to implement it in today’s market? That changes weekly. AI can’t keep up with real-time market conditions, Fed announcements, or the specific mortgage products available in your area this week.
Mistake 2: The Generic Solution to a Unique Problem
Here’s something I learned in my first year as a banker: two people with identical incomes, identical debt loads, and identical goals can need completely different financial strategies. Why? Because their risk tolerance, family situations, career trajectories, and emotional relationships with money are different.
AI gives you the average answer. The statistically most common solution. But you’re not average—you’re you.
I’ve seen AI recommend aggressive investment strategies to people who panic-sell at the first market dip. I’ve seen it suggest debt payoff methods that ignore the psychological wins someone needs to stay motivated. The math was technically correct. The human application? Disastrous.
Mistake 3: The Tax Time Bomb
This one scares me the most. AI frequently makes errors in tax advice—sometimes small, sometimes catastrophic. I had a 29-year-old client who asked ChatGPT about converting his traditional IRA to a Roth. The AI gave him a step-by-step guide that was technically accurate—for someone in a completely different tax bracket and life situation.
If he’d followed through, he would have triggered a $12,000 tax bill he wasn’t prepared for. The AI never asked about his income, never considered his state tax situation, never discussed whether he had the cash on hand to pay the conversion tax.
Here’s what I tell clients: AI can explain what a Backdoor Roth IRA is. It might even explain it better than I can. But it cannot tell you whether you should execute one right now, given your specific financial situation.
Mistake 4: The Investment Hallucination
Remember those “hallucinations” I mentioned? This is where they get expensive. AI has been caught fabricating investment data, citing research papers that don’t exist, and making up performance statistics.
A client showed me a ChatGPT analysis claiming a certain ETF had “historically returned 14% annually with low volatility.” I looked it up. The ETF didn’t exist until two years ago, and it had returned 6% with significant volatility. The entire analysis was fiction presented as fact.
The problem? Unless you’re already financially literate enough to spot these errors, they look perfectly legitimate. The AI uses confident language, presents “data,” and structures its response like a professional report. Only it’s wrong.
Mistake 5: The Emotional Blind Spot
This might be the most underestimated problem with AI financial advice: it completely ignores your emotional reality.
Financial decisions aren’t just mathematical. They’re deeply emotional. The best financial plan in the world is worthless if you can’t stick to it when markets crash, when your friends are buying things you can’t afford, or when life throws you a curveball.
I’ve spent countless hours talking clients through their money fears, their relationship conflicts around spending, their guilt about debt. AI can’t do that. It can’t ask the follow-up questions that reveal what you really need. It can’t hold space for the fact that you’re terrified of investing because your parents lost everything in 2008.
THE FRAMEWORK I ACTUALLY USE WITH CLIENTS
So here’s what I teach people who come to me after getting burned by AI advice. I call it the “AI as Co-Pilot, Human as Captain” framework.
Use AI for:
- Learning basic financial concepts and definitions
- Brainstorming savings strategies or budget frameworks
- Understanding the general mechanics of financial products
- Getting a starting point for research
Never use AI alone for:
- Tax strategy decisions
- Investment allocation choices
- Major purchase planning (home, car, business)
- Insurance needs analysis
- Estate planning
- Anything involving your specific financial details
Always bring to a human professional:
- Complex questions with high stakes
- Situations where your personal circumstances matter
- Decisions involving significant money
- Anything that requires current, real-time information
Here’s the key: use AI as a curiosity engine, not a decision engine. Let it help you understand enough to ask better questions of actual professionals.
WHAT WOULD I DO DIFFERENTLY?
If I were 25 again in 2025, here’s exactly how I’d use AI for my finances:
I’d ask ChatGPT to explain the difference between pre-tax and Roth retirement contributions. Then I’d schedule a free consultation with my employer’s 401(k) advisor to discuss which makes sense for my specific situation.
I’d use AI to help me brainstorm ways to increase my income. Then I’d bring the most promising ideas to a business mentor or career coach who could help me execute them properly.
I’d let AI help me understand what a credit score is and how it’s calculated. Then I’d pull my actual credit report and review it with a financial counselor if I found errors or had questions.
See the pattern? Learn from AI. Decide with humans.
THE FUTURE ISN’T AI OR HUMANS—IT’S AI AND HUMANS
Look, I’m not anti-technology. My bank has incredible AI tools that help me analyze client portfolios, spot patterns in spending, and model different scenarios. The difference? I’m using AI to enhance my professional judgment, not replace it.
The future of personal finance will absolutely involve AI. But it will involve AI in partnership with human expertise, emotional intelligence, and accountability—not AI as a replacement for it.
The clients who do best in my practice are the ones who come in educated. They’ve done their homework. They’ve learned the vocabulary. They’ve thought through their goals. Sometimes that homework started with an AI chatbot, and that’s fine.
But they know the difference between education and advice. They know the difference between learning what compound interest means and being told how much to invest and where.
YOUR ACTION PLAN: THE BANKER’S AI SAFETY CHECKLIST
Before you act on any AI financial advice, run through this checklist:
- Verify the facts: Cross-reference any data points, rates, or statistics with official sources (government websites, financial institution sites, regulatory bodies).
- Check the date: Make sure the information is current. Financial landscapes change quickly.
- Assess the stakes: Is this decision reversible? How much money is involved? Could this impact your taxes, credit, or legal standing?
- Consider your context: Did you provide the AI with enough information about your specific situation? Did it ask follow-up questions?
- Get a second opinion: Run major decisions past a human professional—a CPA, CFP, or banker.
- Trust your gut: If something feels too good to be true or you don’t fully understand it, don’t act on it.
THE BOTTOM LINE (IN MY Own Words)
“AI is a brilliant assistant but a dangerous decision-maker. Use it to learn, not to lead.”
After 15 years of helping people build wealth, I can tell you this with absolute certainty: financial freedom doesn’t come from having all the answers. It comes from knowing which questions to ask and who to ask them to.
ChatGPT can be part of your financial education toolkit. Just make sure you’re the one making the final call—with help from humans who have skin in the game, professional licenses on the line, and the experience to know what AI can’t possibly tell you.
Your financial future is too important to outsource to an algorithm. But it’s also too important to navigate alone. Find the balance. Ask the questions. Do the research. Then work with real humans to make real decisions.
Because in 2025, the smartest financial move you can make isn’t choosing between AI and human advice. It’s learning to use both strategically—with AI as your study buddy and humans as your guides.
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