Professional Financial Advice or AI?

With artificial intelligence becoming more mainstream, and tools like ChatGPT making headlines, many people are wondering if a robot can really replace a seasoned financial pro. Sure, AI can crunch data, summarize tax laws, and spit out investment tips faster than you can say fiduciary. But when it comes to nuanced real life financial decisions, the kind that involve emotions, goals and the occasional curveball - AI has its limits. So here's the question: Would you rely on a machine with your money, or would you prefer advice from someone who's been around the block at least a few times.

[00:01:03]
Hello and welcome to another episode of the Retired-ish podcast. I'm your host, Cameron Valadez, financial planning connoisseur and tax super nerd, where every two weeks I discuss hot button topics for pre-retirees and retirees over age 50 about things like investing, taxes, retirement income, divorce, widowhood, and more. In this episode, we are talking AI and financial advice. So to kick things off, I just want to talk about AI in general and how I personally feel it is impacting the world and finance and taxes and things like that. So truly, I think AI and all the different use cases we have identified so far is the start of the next big revolution for civilization on earth. I really do think that - similar to the development of things like waterways and plumbing, the engine, the Internet, microchips, smartphones - you get the point.

It's one of those things that can truly change many aspects of our lives. And as we've already seen in just a short period of time, most of that has been for the better. Although I know you're already thinking about all those movies about robots taking over the world, I have to agree that is kind of a weird thought to know that we could be close to having problems like that but, I digress.

One of the more basic and user-friendly components of AI so far has been the use of what are called chatbots, like ChatGPT, for example. That's probably the most commonly heard and most popular used chatbot as of right now. And if you're unaware, a chatbot, an AI chatbot, is basically like a search engine such as Google, where you can type or even speak a question or some kind of query into it and within seconds it will scour the Internet and summarize gobs of data to give you a direct answer. Then if you'd like, you can build upon your question or the results that it gives you and just go to your heart's content about whatever you want. It can also do things like generate images that you dream up in your head and tell it to create or even help clean up a letter or email for you by doing some copywriting. It's pretty cool stuff. There are multiple different chatbots out there, not just ChatGPT, and there are also a lot of other forms and areas of AI. These chatbots, as I said, are just one of the more user friendly and widely adopted components of AI by everyday people so far, which makes sense, they're useful and they save time. However, there are some significant limitations and drawbacks to these AI chatbots. They can even provide complete misinformation, outdated information, or cause information overload and be paralyzing at times, especially when used for topics that are naturally very complex and have to be right or at least have little margin of error, such as being used for medical advice or financial advice. We are now literally in an age where nearly everything we want to know is right at our fingertips. From how to unclog a drain to strategies for maximizing Social Security, there's no shortage of answers.

[00:04:26]
Whether you're typing into a search bar, scrolling through your feed, or asking a chatbot like GPT for financial advice, the Internet is overflowing with content. But there's a catch. Just because it's accessible and convenient doesn't mean it's accurate - or more importantly, in your best interest. To understand just how Americans are navigating this information chaos, let's call it, the CFP Board, which is essentially the regulatory body that oversees certified financial planners, conducted a national survey on April 7th and 8th, 2025. The research team sent a 13 question survey to a nationally representative panel of adults age 25 to 64 with household incomes over $50,000. The sample, which was sourced by an online provider called Alchemer, produced 1,044 responses and carries a margin of error per their calculations of plus or minus 3% and at a 95% confidence level. In other words, they indicate that the data is statistically sound and paints a very clear picture. And that picture, it's a little messy.

So to start, here's a couple statistics or things that they found. Three out of four Americans seek out financial information online at least monthly, but only two in five actually believe what they find is aligned with their best interests, and 4 out of 5 - so 80% of Americans - question the accuracy of the financial information they find online at least once a month, and 3 in 5 have regretted a decision they made based on bad financial info. That regret can come at a steep price. According to the survey, 29% made decisions without consulting a professional, 28% paid unnecessary fees, 20% bought financial products that weren't necessarily right for them, and 28% even passed that bad advice along to friends and family. Yikes.

[00:06:43]
And let's not ignore where people tend to get this financial information from. 45% turn to finance websites like NerdWallet or Investopedia, for example. 40% use social media...yes, TikTok finance is a thing. 30% rely on podcasts, 17% have already tried using generative AI tools like ChatGPT or Gemini is another popular one for money or tax advice. Here's the kicker from the study. Americans trust human advisors the most. Three in four say that they feel confident acting on advice from a qualified financial professional without double checking it elsewhere. By contrast, only 38% trust AI tools enough to act on them directly. And even fewer, 37% trust social media.

To me, these numbers still seem too high, but that's my opinion of course. Younger people predictably are more trusting of digital sources, but they're also more likely to make regretful decisions because of them. And you know, it's not hard to see that connection. An example of that could be that someone purchases a home prematurely because an online article or YouTube video said that renting is just throwing money away. And then shortly after they bought the house, the pool cracked and the whole thing needed to be redone and they had to replace the AC unit and they're suddenly regretting the home that's now costing a fortune. Again, this is just an example, but it's still a pretty realistic scenario.

[00:08:24]
What's the takeaway from this research that they did? Access to information is a beautiful thing, but in the financial and tax world, where the stakes are very high and mistakes can be costly and even life altering, not all information is created equal. The Internet can give you speed and convenience. But when it comes to strategy, nuance, emotion and context, which is essentially when things get truly complex, that's where a seasoned, credentialed human comes in.

Now, I want to note a few drawbacks or limitations of relying solely on AI and more specifically the chatbots for advice. And the first and easiest concept to understand is that information can be out of date or sourced from out of date websites. This is especially relevant in the financial and tax world because the laws change all the time. In fact, they just did with the passing of the one big beautiful bill and have changed three or four times over just the last five years. That can be really important when it comes to getting accurate information. There are also sites with misinformation that AI may feed from. This is very common, especially with incredibly complex topics and those where there might be vast disagreements over across the Internet such as in the finance industry. What's better, Roth or pre tax, term insurance or permanent insurance, S Corporation or C Corporation for my business, buying a house versus renting a house, et cetera. AI may even hallucinate and make up parts of its responses. Crazy, I know. And we'll talk a little bit more about why that can happen later. And I will tell you I have personally tried asking basic to complex financial and tax questions that I have a lot of experience with and I will tell you it has been incorrect a lot, sometimes drastically incorrect more times than I can count, especially around taxes. Now don't get me wrong, it can be helpful and is still helpful, but you just need to be careful relying on it completely.

[00:10:43]
The second limitation I want to discuss is in regards to the part of the research that showed 60% of people regret a decision they made from relying only on online advice, which was really interesting to me because we don't even have the full context and it was still such a high percentage of people. Let me explain. What's really important to understand here is that regret or even coming to the realization that something is wrong may not appear immediately and I'd say most likely won't appear immediately. When it comes to money, investment decisions, insurance coverage decisions, estate planning tactics, or taxes for example, we usually can't identify if we've made a good decision right away -unless of course a second pair of eyes that is trained on these topics can identify the issue quickly and notify you. For example, you may choose to invest in something for the long run and you likely won't know whether or not that was a good decision that helped you satisfy your investment goal until a decade plus later.

So imagine buying into a high risk, high reward, new aged hype investment, getting double digit returns for the first couple years. Now you think you made a great decision. Then for the next eight years it underperforms, say US government bonds - it's just pretty lousy. All in all, was it a great decision? Probably not for that investment goal. That could happen with any investment technically, but a trained professional would likely have been able to help you analyze the potential risks and rewards and been able to compare the probabilities of success with other investment options and considerations. Some other examples are that you may have opted for a certain type of insurance coverage, but you won't know how a disaster would play out until one happens, right? Or you could take a certain position on a tax return, thinking it passes muster but then doesn't when you eventually get audited down the road. The point is that it could take years before you realize that something was the right or wrong decision, and this could lead to very costly and even life changing financial decisions that you're making due to responses from some sort of AI chatbot.

And here's yet another drawback. Let's say you ask a chatbot a simple question such as "Should I contribute to Roth or pre tax?" AI will likely tell you that it will depend on the tax rates you think you will be subject to in the future, but won't be able to factor in personal circumstances that can actually alter your tax rates in the future. So that is opposed to tax rates just changing because of outside circumstances and Congress. There are factors in your own life that can change the tax rates that you're subject to. Arguably the most important factor here is the fact that the financial advice that's being taken by a chatbot is not monitoring the changes in your personal life and financial situation on an ongoing basis, which can ultimately render certain pieces of advice costly and regrettable. It can't consider every aspect of your situation, and even if you feed it more and more information, you may be unintentionally leaving out important information, such as certain tax deductions you may have as a business owner, the fact that you are very likely to inherit large retirement accounts from your parents within five to 10 years. Or what if you get diagnosed with a terminal illness two years later, et cetera? How might those affect your financial and tax situation in the future, which in turn determines whether or not you should do Roth or pre tax. In other words, you don't know what you don't know.

[00:14:44]
AI is often incomplete. It's not replacing personal advice. In particular, AI chatbots are making it so we can receive information and make decisions faster because it can cut down time on gathering data, making sense of the data and then making it presentable. So yes, it can reason to an extent and be helpful, but that all depends on what you feed it. For example, if you asked an AI chatbot for a retirement spending plan based on all of your financials and your assumed longevity, it's very likely to give you a rather meaningless number if anything. Plus, as I mentioned, it's not continuously and automatically updating its decision or answers as things happen in your life and as you age. If you were to ask AI exactly when you should buy or sell an investment for the most optimal return, it will be wrong. Just like humans, it doesn't have a crystal ball. Those decisions will be dependent upon so many other factors of your life, your financial situation and your emotional desires. This requires human advice because, as Carl Richards says, "Money equals feelings".

Another limitation is that AI can't necessarily solve many aspects of planning, because so many decisions, especially around money, are personal and emotional - like we just mentioned. For instance, what's the best way for me to structure my estate plan for my spouse and kids, who all have different tax situations and goals and lives? How can I spend enough of the assets I've accumulated so that I don't leave my family too much money if I pass prematurely, and so I can enjoy more of my own money while I'm alive without running out? Or what about our family business? Should we plan to sell and let the kids inherit the money or plan to transition the actual business to them? What are the lifelong ramifications of each of those decisions? These types of decisions, you can't just simply calculate. AI may give you ideas, let's say, about transferring the business to kids. But will it let you know that based on your financials, you're likely going to be subject to estate taxes if you live another 10 years? And that you should weigh the cost of your kids, paying those estate taxes at your death or receiving gifts, and paying capital gains taxes on certain assets in the estate instead? Likely not. Unless you asked it about those things specifically. You're probably like, what did he even just say? Yeah, I'll admit that's probably a little advanced, but yes, those scenarios are very real.

[00:17:35]
Is there even a clear right or wrong answer to something like that? Black and white? No, not really. Because doing one thing may cause, in that example, more taxes to be paid than another, but it may fulfill your goals while you're alive. Maybe the taxes aren't as important as making sure your legacy isn't squandered and you want to see your kids or grandkids enjoy what you've built. You don't want them to get all the money after you're dead. Again, you don't know and AI doesn't know what it doesn't know. For personal advice, AI must be prompted to be able to help. Even then, it can only get so far by providing direct advice.

Another interesting and potential issue of relying solely on AI is that we generally use these chatbots in order to save time and have it summarize topics that either we know nothing about or topics we know are complex. And when we don't get the exact details or answers that we were expecting and looking for, we then need to do further research manually, which takes more time, which can defeat the purpose of using the chatbot in the first place. So rather than doing the hard work, we'd rather rely on the relatively basic information that it initially gives us without cross checking or going into more detail in looking behind the curtain. And lastly, it can be counterproductive to go down an AI chatbot rabbit hole where you receive so much information which some will be correct and some incorrect, and you may not know which is witch, but you end up getting cognitive paralysis and not using any information or implementing any changes because you simply don't know what route is best for your situation. Many people experience this even without AI in the picture, such as I read an article that said to do this, but my friend who is supposedly a good investor says do that. AI has the ability to now make decisions actually harder to make.

[00:19:46]
Lastly, I want to discuss the fact that not all AI is created equal. There's sort of an AI mirage, so it's hard to know what to trust. More specifically, I want to talk about the difference between predictive AI and generative AI. Because as I said, not all AI is created equal. Understanding the distinction can help you hopefully avoid some costly financial mistakes. First, predictive AI is like a really fast spreadsheet on steroids. It analyzes mountains of historical data to try and spot patterns and forecast outcomes. And you've seen it in action. For example, every time your phone autocompletes your text messages. It's basically about probabilities, not poetry.

Generative AI, on the other hand, is like the chatty cousin who shows up with a thousand ideas, some brilliant, some questionable. It creates new content, text, images, videos, even voices based on what it's learned. It includes tools like ChatGPT, which can generate human-like responses, entire articles, or even components of direct financial advice, at least on the surface. Here's the critical point: Generative AI doesn't actually understand anything. It's extrapolating from patterns. That means it might sound confident, even convincing, but it can still generate completely false or misleading information. It doesn't verify facts, and it sure doesn't understand your personal financial goals, emotions or context. This partly explains why when it gives you a really confident answer on your latest financial or tax question, it can still be completely wrong. As I have personally experienced like I shared with you more times than I can count. But a non professional probably wouldn't know any better and wouldn't question it. I know if I did the same thing but asked it medical questions, I wouldn't know right from wrong no matter what I asked.

[00:21:56]
And while this technology is amazing, it's also being weaponized in a sense. Regulators have already seen a spike in investment scams disguised as AI powered miracle machines. According to the California Department of Financial Protection and Innovation, scammers are leaning hard into the AI hype, especially with certain types of hyped up investments. For example, they'll claim to have bots that can generate insane profits. Sometimes they even use deepfakes or AI generated avatars to create fake CEOs for fake companies, parading them around in cool YouTube videos. The whole thing looks polished, but it's basically snake oil in a shiny bottle. They're also cloning voices, literally using AI to make it sound like a loved one is calling you. It's pretty terrifying how convincing some of this stuff is getting. Here's the thing. The fraud isn't always high tech. Sometimes it's just wrapped in tech buzzwords. If someone pitches an AI trading bot, let's say promising sky high returns with zero risk, you should hear alarm bells going off because that doesn't exist. You know, if it sounds too good to be true, usually it is.

So how do you protect yourself in these situations? Well, one, be skeptical of any investment claiming to use AI to generate outsized returns versus an index or other money manager or real estate what have you. Second, don't fall for platforms promoting their quote unquote AI advantage unless you can verify they're legit and regulated. Number three, never invest just because something sounds smart, even if it's delivered by a chatbot or a guy in a suit calling himself a financial engineer. And lastly, if you're being asked to recruit others into the opportunity, the investment opportunity, congratulations you may have just been handed a pyramid scheme.

[00:24:07]
Circling back to the research we discussed earlier from the CFP board, most Americans already sense the problem. In their recent April 2025 survey, 80% of respondents said they questioned the accuracy of online financial information and at least monthly. And nearly 60% admitted they've regretted a financial decision based on bad advice they found online. Younger Americans, those more likely to turn to AI tools and social media for advice are also more likely to get burned by them. So the message is pretty clear: AI may be fast, fancy and very cheap, but it's not always right and especially when it comes to financial advice, making poor choices can result in really expensive mistakes, sometimes life changing. And it's definitely not human, which is good in some ways but bad in others.

A seasoned financial professional, however, can factor in your goals, your timeline, your tax situation, probably changes in your future situation and and your emotional blind spots. AI cannot. Professionals can even use AI to get even better at what they already do to get you the proper advice in more efficient ways. AI will likely free up more time for them to offer a better or higher level of service to their clients. So yes, lean on AI to generate ideas, use it to speed up research and use it to be better at what you do. But when it comes time to take action, especially with your finances and your life savings, trust but verify with a real person, preferably one who didn't just learn finance by scrapping through Reddit threads. Use AI as a support tool, not a replacement

[00:26:01]
That wraps up this week's episode. If you haven't already, subscribe to and follow the show on your podcast app. That way you get notified each time a new episode drops every two weeks. Also, be sure to check out our free monthly video newsletter to get more useful information on retirement planning, investments and taxes once a month straight to your inbox. The newsletter will often dive deeper into some of the topics discussed on the show, as well as useful guides and charts available for download. As always, you can find the links to the resources we have provided in the episode description right there on your podcast app, or you can head over to RetiredishPodcast.com/74. Thanks again for tuning in and following along. See you next time on Retired-ish.

[00:27:07] Disclosures
The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

Cameron Valadez is a registered representative with, and securities and advisory services are offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC.

Neither LPL Financial nor its registered representatives offer tax or legal advice. Always consult a qualified tax advisor for information as to how taxes may affect your particular situation.

Tax and accounting related services offered through Plan-It Business Services DBA Planable Wealth. Plan-It Business Services is a separate legal entity and not affiliated with LPL Financial. LPL Financial does not offer tax advice or tax and accounting related services.