Some South Africans are turning to artificial intelligence (AI) for financial advice.
While AI can be a useful tool, consumers should think twice before relying on it to make important decisions about their money, warns Momentum Savings head of marketing Andile Jonas.
AI can quickly answer questions about saving, investing and budgeting. It can explain financial terms in simple language and compare different options. This can save time and help people better understand their finances.
But there is a big difference between getting information and receiving financial advice.
Financial decisions are personal. They depend on your income, debt, family responsibilities, future goals and how much financial risk you are comfortable taking. AI cannot fully understand your personal circumstances or the emotional side of money.
While AI can help solve everyday problems and challenges, Jonas draws the line when it comes to financial advice.
According to Jonas, AI is good at gathering information, but it does not truly think or understand people the way a qualified financial adviser can.
He warns that relying only on AI could lead to “one-size-fits-all” advice.
That is because no two people have the same financial needs. Even families with similar incomes may have completely different goals, responsibilities and dreams.
Another concern is that life can change overnight.
Losing a job, getting married, having children or facing a medical emergency can all affect your financial plans. A qualified adviser can adjust your strategy as your circumstances change, while AI may not recognise these important shifts.
Jonas also questions whether AI can consistently recommend the most suitable products or understand the benefits of combining different financial solutions. It may also miss opportunities to save money through loyalty rewards or product discounts.
One of the biggest dangers is that consumers may accept AI-generated answers without understanding the reasoning behind them.
Jonas points to the idea of “cognitive debt”, a term used by designer and futurist John Willshire. It describes what happens when people stop thinking for themselves and simply accept answers without understanding the reasoning behind them.
In other words, you may end up following a financial plan without knowing whether it is actually right for you.
A good financial adviser offers more than product recommendations. They help you set priorities, understand your risk tolerance and avoid costly mistakes. They can also stop you from making emotional decisions during difficult times, such as selling investments when markets fall.
Perhaps most importantly, a financial adviser reviews your financial plan regularly and adjusts it as your life changes.
What consumers should do
- Use AI to learn about financial concepts and better understand basic money matters.
- Never rely on AI alone when making major financial decisions such as investing, retirement planning or buying insurance.
- Speak to a qualified financial adviser before committing to products that could affect your long-term financial security.
- Review your financial plan regularly, especially after major life events such as marriage, divorce, having children or changing jobs.
- Ask questions until you understand why a recommendation is being made instead of simply accepting an answer.
AI is a powerful assistant and can make managing everyday tasks easier. But when it comes to protecting your financial future, it should support human advice, not replace it.
As Jonas puts it, trusting AI alone with your money is a bit like relying on “Dr Google” to perform heart surgery. Information is useful, but professional advice can be worth far more than the cost of getting it.
