What AI Can and Can't Do for Your Financial Plan

What AI Can and Can't Do for Your Financial Plan

The honest answer is: quite a bit, and not enough.

AI tools have become genuinely useful for understanding financial concepts, running projections, and exploring options. If you want to understand how a Roth conversion works, model a basic retirement scenario, or research the mechanics of a 10b5-1 plan, a good AI tool will give you a reasonable answer in seconds.

That's real value. It's also not what most people need most of the time.

Where AI Performs Well

The strongest use cases for AI in financial planning are educational and exploratory:

• Concept explanation - "What is QSBS?" "How does a charitable remainder trust work?" "What's the difference between a SEP-IRA and a defined benefit plan?" AI handles these well.
• Basic modeling - Simple projections, contribution scenarios, and tax estimates are well within current AI capability.
• Research and preparation - Using AI to prepare questions before meeting with an advisor is genuinely productive.

Where It Falls Short

Financial planning is not primarily a knowledge problem. Most people understand, at a general level, that they should save more, diversify, and minimize taxes. The gap is almost never information - it's judgment.

Judgment requires context. It requires knowing that you received ISOs rather than NSOs, that your company's lockup period expires in six months, that your state taxes capital gains as ordinary income, and that you have $400K in concentrated stock that was already subject to an 83(b) election. No AI tool has that context unless you provide every detail - and even then, it cannot be accountable for the recommendation in the way a fiduciary advisor can.

There is also the hallucination problem. AI tools generate plausible-sounding answers with some regularity that are factually wrong. In financial planning, the cost of acting on a wrong answer can be significant and sometimes irreversible.

The Right Way to Think About It

AI is a research tool, not an advisor. The distinction matters.

A tool can explain a concept. An advisor can tell you whether that concept applies to your situation, in what form, at what size, and in what order relative to everything else you have going on. That interpretive layer - specific, accountable, and built on a complete understanding of your financial picture - is where the value lives.

The best advisors already use AI tools in their own work. The question was never whether AI is useful. It's whether it can replace judgment. It can't.