AI Doesn’t Do Feelings, Taxes, or Consequences – Before You Ask AI for Financial Advice…Read This!
On a typical day, ChatGPT and/or Grok hear from me on several different topics – many around how long to cook XYZ item in the air fryer, if a certain fruit is safe for Pomeranian consumption, and how long I can go without a trip to my Botox injector. When it comes to financial advice, relying on AI alone is where many smart people unintentionally go off the rails.
And I get it — it’s tempting. AI is fast, accessible, available 24/7, and speaks in confident paragraphs that sound like good advice.
As someone who has spent over 20 years helping clients navigate real financial lives — with divorces, corporate structures, mortgages, behavioural patterns, tax realities, and the occasional emotional curveball — I can tell you this:
AI is great at calculations. It is not great at context.
And context is where real financial advice lives.
Here are the five biggest mistakes people make when they rely on AI for financial guidance.
- AI Answers the Question You Asked — Not the One You Should Have Asked
Financial planning isn’t just about numbers. It’s about the why behind those numbers.
AI doesn’t know:
- your debt situation
- your business structure
- your tax realities
- your marital status (or separation dynamics)
- your retirement timeline
- your risk capacity vs. your emotional risk tolerance, and let me tell you, these are often two very different things!
Unless you feed it every detail of your life — and most people don’t — AI fills in the blanks with assumptions.
Bad inputs = misleading output
The math is correct. The advice is not.
- AI Can’t Follow Suitability Rules or Regulatory Standards
A human advisor must follow strict requirements:
- Know Your Client
- Know Your Product
- Suitability obligations
- Risk profiling
- Fiduciary responsibility
AI has none of these constraints.
That means it may confidently recommend something:
- too risky,
- too illiquid,
- too tax-inefficient,
- or completely inappropriate for your age and goals.
What sounds like a “smart strategy” could violate every regulatory framework that protects you. Regulation, while sometimes seems cumbersome, is incredibly important in the grand scheme of things. Where do you go when things go wrong?
- AI Struggles With Taxes — Especially Canadian Ones
This is where AI routinely goes off the rails. Shoutout to my accountant for saving me from myself. Apparently, Rania’s daycare and my nail appointments don’t qualify as business deductions (rude). I work with money day in and day out yet still defer to the experts on the ever-changing document called the Income Tax Act.
Common examples of AI getting things wrong:
- When to use FHSA vs. RRSP vs. TFSA
- Attribution rules between spouses
- Passive income tax inside a corporation
- Capital gains impact on OAS clawback
- RRSP withdrawal sequencing
- Dividend sprinkling restrictions
- Small business share structuring
AI gives generalized tax information, often based on outdated or U.S.-focused rules. Real tax planning requires precision — and precision requires a human. If your prompt is messy, AI will deliver tax advice so unhinged your accountant will stage an intervention and the CRA will bring popcorn.
- AI Gives Generic Advice, Not Strategy
AI can tell you:
- “Invest for the long term.”
- “Build a diversified portfolio.”
- “Increase your savings rate.”
All technically correct. And completely useless without customization.
What AI can’t do is build you a cohesive strategy, such as:
- which accounts to fund first,
- how to structure retirement income to avoid early depletion,
- how to optimize corporate vs. personal funds,
- how to manage income splitting within CRA rules,
- how to invest based on your cashflow, your tax bracket, and your goals,
- or how to pivot your plan when life throws a curveball.
Financial planning is not a list of tips. It’s an integrated, evolving system. It requires revisitation in a timely manner and especially after major life-changing events — the kind that hit so fast your facial expressions break through three units of Botox.
- AI Can’t Manage Emotions — and Money Is Emotional
This is the biggest gap.
AI can tell you:
- “Do not panic sell.”
But AI cannot:
- recognize when you’re on the verge of panic,
- understand the emotional weight of a divorce, career change, death, etc.
- help you stay disciplined when markets drop,
- coach you through uncertainty,
- or keep you accountable to your own long-term plan.
Most financial damage happens not because people don’t know what to do — but because emotions win over logic.
AI can’t stop that. A real advisor can.
The Bottom Line
There’s a difference between information and advice. AI is an incredible tool. I use it in my practice for education, modeling, and simplifying financial explanations — and in my kitchen so I don’t accidentally feed my dog a berry that sends us both into a panic spiral.
AI delivers information. A seasoned advisor provides advice — grounded in your goals, your tax reality, your behaviour, and your life. To a good financial future!
