Personal finance and AI: Should you trust ChatGPT’s investment advice?

They ask, “Should I buy?” — and ChatGPT answers. Across the world, retail investors are letting AI chatbots into their portfolios, despite regulators insisting these tools aren't yet ready to replace professional advice.

Regulation around AI-assisted investing is still evolving, but nearly one in five retail investors already use such tools to make or adjust portfolio decisions, according to a recent report by trading platform eToro. The report, based on a survey of 11,000 retail investors across 13 countries, did not specify which AI tools were used.

According to experts, the key question is whether AI interfaces are employed as research aids to support decision-making or whether they are providing direct investment advice. The latter is a regulated activity in the EU under the Markets in Financial Instruments Directive (MiFID), and no publicly-available AI tool is currently authorised to do so, according to the European Securities and Markets Authority (ESMA).

Nevertheless, many retail investors see ChatGPT-like tools as a way to save time on research and reduce the cost of professional fund management. In some cases, the results can be striking.

In 2023, comparison website Finder launched an investment fund designed and almost entirely managed (99%) by ChatGPT. Two and a half years later, the 38-stock portfolio is up nearly 55% — outperforming the average of the UK’s ten most popular funds by more than 18 percentage points.

Despite this success, many signs suggest that complex, unpredictable financial market moves may rattle the otherwise good results of the likes of ChatGPT and Gemini, as they may not accurately predict outcomes, leading to financial losses.

OpenAI told Euronews that "ChatGPT is designed as a general-purpose conversational assistant", and for "sensitive or consequential topics like financial decisions, the assistant is trained to offer information without giving definitive advice best left to licensed professionals."

According to current European regulations, firms may use AI tools to analyse a client’s knowledge and experience, financial situation (including risk tolerance), and investment objectives (including sustainability preferences). This is in cases where companies are providing personalised investment recommendations or managing and rebalancing client portfolios, among other tasks.

When using AI tools in the context of financial advice, ESMA also stresses that transparency, governance, auditability, and human oversight must be prioritised.

AI's role in the financial sector

Artificial intelligence is increasingly reshaping finance, powering everything from customer service and fraud detection to portfolio management and personalised advice.

Behind the scenes, thousands of sophisticated AI models crunch vast amounts of data — market trends, historical prices, and even news headlines — to forecast movements and spot investment opportunities.

A 2025 study in Nature compared ChatGPT with other AI tools used in finance. It found that the chatbot's ability to process unstructured data, such as financial reports and user queries, makes it particularly effective in tasks like financial planning and risk analysis. But the study also highlighted a major concern: if the data fed into these systems is biased or inaccurate, AI can produce misleading results — a phenomenon known as “hallucination”.

Investment platform BridgeWise, which provides AI-powered research and analysis and investment recommendations on over 50,000 assets, offered a clear example of why tools like ChatGPT can be risky if not used correctly.

“If you ask a question about a company that is not very well-known, this is where hallucination will come because the chat will try to please you [by providing an answer],” warned Gaby Diamant, BridgeWise's co-founder and CEO. He advised against general prompts such as “Should I invest in X?”, noting they can produce highly misleading results.

BridgeWise emphasises that qualification and compliance with regulation are key. The company delivers AI-driven research and analysis over specific assets — including stocks, ETFs, and funds — and partners with stock exchanges in Switzerland, Israel, Japan, and Brazil.

The firm uses an advanced algorithm designed to interpret market movements. “We offer a decision-support tool — we don’t make decisions for our clients,” said Diamant.

When asked whether AI can entirely replace financial advisors, Diamant was clear: “Never.” He believes human judgment remains essential to understanding client needs and navigating the complexities of financial advice — something AI cannot yet replicate.

Still, he sees AI as a powerful enabler: “Our mission since founding BridgeWise in 2019 has been to make capital markets accessible to everyone.”

The future of AI in our finances

It seems clear that the technology must develop further before ChatGPT can take on the role of guiding retail investors through the often turbulent landscape of financial markets.

According to Kieran Garvey, AI research lead at Cambridge Centre for Alternative Finance, though AI machine learning is very advanced in lots of different areas within financial services, the technology to provide financial advice is “nowhere near reliable” at the moment.

To address these limitations, Garvey pointed to a major emerging development: “The big trend that’s happening in AI, both generally and within financial services, is agentic AI.”

This refers to technology that enables AI systems to operate with increasing levels of automation — allowing them to plan and execute complex processes using a range of tools, becoming more self-directed in the process.

“So, we as humans can instruct them to complete a particular task,” he continued, “and they are then able to determine what needs to be done, plan the process, and interact with different tools to carry it out.”

Customers could enable AI agents to make payments on their behalf, meaning they could book a holiday or do the shopping, he added.

Despite limitations, automated financial advisors with little to no human intervention are becoming more popular, and experts expect this so-called robo-advisory market to boom over the next five years.

According to global market research and consulting firm The Business Research Company, this market is forecast to expand to over $471 billion (€405bn) by 2029, a sizeable jump from nearly $62bn (€53bn) in 2024. The market value is the sum of the total revenues businesses gain from the sale of goods and services in this field.

Disclaimer: This information does not constitute financial advice, always do your own research to ensure investments are right for your specific circumstances. We are a journalistic website and aim to provide the best guidance from experts. If you rely on the information on this page, then you do so entirely at your own risk.