Why AI chatbots can’t be trusted for financial advice: They’re sociopaths

Subscribe to enjoy similar stories. Should you use AI for financial advice? Andrew Lo, a finance professor at the Massachusetts Institute of Technology’s Sloan School of Management, says not yet. Large language models like Copilot or ChatGPT aren’t suited to being used as financial advisers because they are the digital equivalent of sociopaths—smooth, persuasive and devoid of empathy.

If an adviser powered by artificial intelligence “is able to communicate both good and bad financial advice with the same pleasant and convincing affect, its clients will rightfully view this as a problem," Lo and one of his graduate students, Jillian Ross, wrote in 2024 in an article for the Harvard Data Science Review. (Today’s robo advisers, like those offered by Betterment and Wealthfront, went into action before the era of large language models and aren’t built on them for the most part, so Lo’s critiques don’t apply to them.) Still, people are already using AI tools for help with their finances. This past August, a survey of 11,000 individual investors in 13 countries commissioned by eToro, a trading and investment platform, found that 19% were already using ChatGPT-style AI tools to manage their portfolios, up from 13% in 2024.

That worries Lo. “The AI people are using now can be dangerous, especially if the user isn’t fully aware of the biases, inaccuracies and other limits" of large language models, he wrote in an email. Despite his reservations about current AI models, Lo believes that large language models will eventually be able to help investors—especially people with small accounts and limited experience with investing.