Beware: AI Financial Advice is Costing People Money
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Artificial intelligence (AI) is becoming a go-to source for financial and tax advice, but new research shows it comes with real risks.
Can We Rely on AI?
A recent survey found that 1 in 5 people have acted on AI-generated financial advice, and nearly 19% lost more than $100 as a result. Among Gen Z, that number jumps to 27%.
The advice people followed ranged from tax tips (9%) to stock buying (22%) and cryptocurrency trading (21%). Shockingly, more than a quarter of respondents believe AI can give them all the financial advice they’ll ever need.
The same survey shows people are using AI for medical and legal decisions too, with 22% admitting they acted on wrong medical advice and 31% saying they would let an AI lawyer defend them in court to avoid legal fees. This is despite evidence that AI can get basic legal facts wrong 60–80% of the time.
So why are people putting so much trust in algorithms? The research highlights three reasons:
Cost – Many view professional advice as too expensive.
Access – Not everyone can reach a professional when they need one.
Declining trust – Worryingly, some believe AI or even social media influencers are more reliable than experts.
What Can We Learn?
For accountants in South Africa, the message is clear: clients may be tempted to rely on AI for tax and financial advice without checking it. This opens them up to errors, penalties and bad financial decisions.
Experts stress that AI should be treated as a tool, not a replacement. The safer approach is hybrid intelligence – using AI for convenience and speed, but always combined with the insight and judgment of a qualified professional.
AI can help, but it cannot replace the trusted role of an accountant.
Source Article: Accounting Today
