AI Financial Planning - Why AI Shouldn’t Replace Financial Planners (And How to Use It Safely)

Yes, I know, as a Financial Planner, I would say this, wouldn't I?

Guilty as charged.

The Rise of AI in Finance

Artificial Intelligence has become part of everyday life. It writes documents, helps us with marketing, and even answers complex questions in seconds.

It’s fast, convenient, and often impressive. So it’s no surprise that people are starting to wonder: Can AI replace a financial planner?

We hear about it taking jobs all over the world, why would it be different for a financial planner?

The short answer is: it might, but probably won't replace all of them.

There is undeniably an 'advice gap' in the UK, whereby the cost of regulation has meant that most financial planning businesses can't profitably work with clients with smaller portfolios or who should pay lower fees.

So it's possible that AI can help for those people who can't or won't pay for the advice from a financial planner.

But for those that can afford it and need it?

Well, AI can be useful in certain ways, but it’s not a substitute for regulated advice. In fact, relying on it for major financial decisions could be a costly mistake.

Let’s look at why, and where AI can still play a helpful role.

Why AI Falls Short as a Financial Planner

1. There’s No Accountability

When you work with a regulated financial planner, you’re protected. Their advice is backed by qualifications, compliance standards, and professional indemnity. If something goes wrong, you have recourse.

AI doesn’t offer that. It’s just software. If it gives you bad advice, there’s no one to take responsibility and no safety net to fall back on. You're not going to be able to take Sam Altman to court if you make a mistake with your pension, I'm afraid.

2. It Doesn’t Challenge You

AI is designed to give answers. It doesn’t ask probing questions or challenge your assumptions. It won’t say, “Are you sure that’s the right move for your family?” It simply responds to what you type.

Financial planning is about more than numbers. It’s about understanding your goals, your time-frames, your values, and your risk tolerance. That requires a conversation. A real one.

3. It’s Built for Words, Not Numbers

Tools like ChatGPT are language models. They're literally called Large Language Models (LLMs).

They’re brilliant at sounding clear and confident, but they’re not built for complex calculations or regulatory compliance. That’s a problem when you’re dealing with pensions, tax planning, or investment strategies.

AI can explain concepts well, but it’s not going to optimise your tax position or calculate your pension allowances with guaranteed accuracy.

4. You Don’t Know What You Don’t Know

Here’s the biggest risk: if you’re not an expert, how will you know when AI gets it wrong?

These systems can 'hallucinate'. A technical term for confidently presenting incorrect information. If you don’t know the rules, you won’t spot the mistake. And that mistake could cost you thousands.

5. Big Life Decisions Need Human Judgment

Buying a home, selling a business, planning for retirement.

These are decisions that shape your future.

They involve emotions, priorities, and trade-offs that AI simply can’t understand.

A regulated planner can help you weigh options, look at trade-offs, consider long-term implications, and make choices that align with your life goals.

6. Couples Need More Than Calculations

Money is rarely just about numbers. For couples, it’s much more about values and priorities.

What if one partner wants to invest aggressively while the other prefers security?

We see this often with our business owner clients and their partner or spouse who has a salaried job and/or prioritises raising children.

What about when one dreams of early retirement while the other wants to keep working?

AI can’t mediate those conversations.

A human financial planner can help you find common ground and create a plan that works for both of you, and your family. In this way, financial planners often need to be good mediators!

Where AI Can Help (If You Use It Wisely)

AI isn’t all bad. Used carefully, it can make your financial journey easier. If used right, these are some of the great things it can help with.

Simplifying Complex Documents

Financial reports and policy documents can be overwhelming. AI can summarise them or translate jargon into plain English.

That’s useful, provided you’re comfortable sharing your personal and financial data with an AI.

Sense-Checking Technical Details

If you already have advice from a regulated planner, AI can help you check whether the technical details align with what you’ve been told.

But remember: this is a language check, not a substitute for professional judgment.

Learning and Research

AI is great for education. Want to understand what “business relief” means or how “pension tapering” works?

It can explain these concepts quickly and clearly. Just don’t confuse learning with advice.

What to Take Away From This

AI is a powerful tool, but it’s not a financial planner. For decisions that shape your future retirement, business succession, buying property, or navigating financial priorities as a couple, trust a regulated professional who understands you as a person, your goals and is accountable for their advice. Use AI for clarity, not for strategy.

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Jamie is Lab Financial Planning Managing Director, and a Certified Financial Planner™.

He advises business owners to help with their tax-efficient financial planning, and ensuring that they and their family are well protected, in any scenario.

If you'd like to discuss your financial planning, why not get in touch to see if we can help?

Remember, there are no stupid questions. Everyone has a different level of knowledge about money and planning their finances. We speak in plain English to help take away the fear and empower you to use your money well.

You can drop Jamie an e-mail here: jamie@labfp.co.uk

Or, you can book in a free introductory call, to discuss your situation, here: https://calendly.com/labfp/intromeeting

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FAQ

1. Can AI replace a financial adviser?

No. AI can provide information and simplify complex topics, but it cannot offer regulated, personalised advice. Financial planning involves accountability, compliance, and understanding your unique goals, things AI cannot replicate.

2. Is it safe to use AI for financial decisions?

AI is safe for research and education, but not for making big life-changing decisions like retirement planning, buying property, or selling a business. Always consult a regulated financial planner for these situations.

3. What can AI do well in financial planning?

AI can summarise documents, explain jargon, and help you sense-check technical details. It’s a great tool for learning, but it should never replace professional advice.

4. Why is human advice essential for couples?

Money decisions often involve emotions and values. If you and your partner have different views on spending, saving, or investing, a human adviser can mediate and create a plan that works for both of you. AI cannot handle these conversations.

5. What are the risks of relying on AI for financial advice?

AI can make mistakes or present incorrect information confidently. If you don’t know the rules, you won’t spot the error and that could cost you thousands. There’s also no accountability if things go wrong.

6. How financially literate is the average person in the UK?

Research shows that 73% of UK adults score below the benchmark on financial literacy tests, and only 5% answer all questions correctly. This makes relying on AI even riskier for complex decisions. (Source: Wealthify & CEBR)

7. Should I share personal financial data with AI tools?

Only if you’re comfortable with the privacy risks. AI tools process data to generate responses, so consider what you share and whether the platform is secure.