AI Financial Advisers: A Closer Look
My goal is to be debt-free by the end of 2025, and as a reporter who often tests new software, I was curious about trying some of the AI financial advisers that have gained popularity in recent years. Hiring a human money manager can easily cost a few thousand dollars, so more people, especially younger users, are turning to AI tools for advice. From Apple’s top charts of free finance apps, I decided to try two well-reviewed options offering up chatbots intended to fix money woes: Cleo AI and Bright.
How AI Financial Advisers Work
Both Cleo AI and Bright encourage users to connect their bank account to the app through a third-party service called Plaid. This allows the chatbots to break down spending habits, help users pay off debt, and build credit. “Using the bank data and what you’ve said to us, Cleo will be your kind of confidant or coach,” says Barney Hussey-Yeo, the company’s CEO and founder. “She’ll provide the right advice and the right products to help you make better financial decisions.”
A Closer Look at Cleo AI
Fair enough, but some of the guidance Cleo gave me veered from that path. While it had engaging moments, like an amicable roast highlighting where I overspent in unnecessary ways, the generative AI tool seemed mainly preoccupied with using my personal data for upselling opportunities. Bright was the same.
Cash Advances and Upselling
For example, I started one conversation pretending to be sad and lacking enough money to buy groceries. According to Hussey-Yeo, Cleo’s core demographic of users are young people who are living paycheck to paycheck and “feel the pain of finances more than most people.” So I thought this would be the kind of thing users shared all the time. The bot feigned sympathy and immediately started encouraging me to check whether I was eligible for a cash advance through the app.
After Cleo cleared my eligibility for a cash advance, I was prompted to sign up for a $6 monthly Cleo Plus membership. The first time I used it, the app offered a $130 cash advance, split into $65 increments over two days. Users technically don’t have to pay a fee for the cash advance if they are willing to wait an estimated three to four business days—a difficult feat for people living between paychecks and a distraction from my goal of paying off previous debts.
Conclusion
In conclusion, while AI financial advisers like Cleo AI and Bright may seem appealing, they may not be the best solution for everyone. Both apps seemed more interested in upselling and offering cash advances than providing genuine financial guidance. As someone trying to pay off debt, I found their advice to be more of a temptation to take on additional debt rather than a real solution to my money issues.
Frequently Asked Questions
Q: What is the purpose of AI financial advisers?
A: AI financial advisers aim to provide personalized financial advice and guidance to users, helping them make better financial decisions and achieve their financial goals.
Q: How do AI financial advisers work?
A: AI financial advisers use machine learning algorithms to analyze users’ financial data, spending habits, and goals. They then provide tailored advice and recommendations to help users achieve their financial objectives.
Q: Are AI financial advisers reliable?
A: While AI financial advisers have the potential to be reliable, they are only as good as the data they are trained on and the algorithms used to analyze that data. It’s essential to research and understand the limitations and biases of AI financial advisers before using them.
Q: Can I trust AI financial advisers with my personal data?
A: AI financial advisers require users to connect their bank accounts and other financial data to provide personalized advice. It’s essential to research the security and privacy policies of the AI financial adviser before sharing your personal data.
