Financial literacy concept with AI

GPT's Financial IQ: Can AI Really Give You Better Money Advice?

Avery Sinclair in Business & Economy July 2025 • 4 min read.

"New research reveals how GPT-4 is acing financial literacy tests, raising the question: Are robo-advisors the future of financial planning?"

The world of finance is rapidly changing, and artificial intelligence (AI) is at the forefront of this transformation. From robo-advisors to AI-powered investment tools, technology is increasingly playing a role in how we manage our money. One of the most intriguing developments has been the rise of large language models (LLMs) like GPT (Generative Pre-trained Transformer), which are demonstrating impressive abilities in understanding and processing complex information.

A recent study has delved into the financial literacy of GPT models, assessing their performance on standard financial literacy tests. The findings are eye-opening, suggesting that the latest iterations of GPT, particularly GPT-4, possess a surprisingly strong grasp of financial concepts. This raises an important question: Could AI become a reliable source of financial advice for the masses?

This article explores the implications of this research, examining how GPT models perform on financial literacy tests, what this means for the future of financial advice, and the potential benefits and risks of relying on AI for financial decision-making.

How Financially Literate is GPT?

The study assessed the financial literacy of different GPT models using a series of single-choice test questions covering essential financial concepts. These questions were drawn from the 'Big Five' items and the Financial Literacy Baseline Survey, ensuring a comprehensive evaluation. The models tested included Davinci and ChatGPT (based on GPT-3.5) and ChatGPT (based on GPT-4).

The results revealed a significant disparity in performance between the different models:

Davinci and ChatGPT (GPT-3.5): Scored 66% and 65% respectively, only moderately outperforming a baseline score of 33% expected from random guessing.
ChatGPT (GPT-4): Achieved a near-perfect score of 99%, demonstrating a remarkable understanding of financial literacy.

This stark contrast highlights the rapid advancements in AI capabilities. While earlier models showed limited financial understanding, GPT-4 demonstrates an emergent ability to grasp and apply complex financial concepts. The financial literacy tests included questions about:

The Future of Financial Advice: A Blend of AI and Human Expertise?

The rise of financially literate AI models like GPT-4 presents both opportunities and challenges. While AI has the potential to democratize access to financial advice and empower individuals to make more informed decisions, it's essential to recognize its limitations and potential risks. Overreliance on AI without critical evaluation could lead to poor financial outcomes. It is very important to consult human financial advisor before implementing plans made using AI tools.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

Everything You Need To Know

How did GPT-4 perform on financial literacy tests compared to earlier GPT models?

GPT-4 demonstrated a remarkable understanding of financial literacy, achieving a near-perfect score of 99% on the tests. In contrast, earlier models like Davinci and ChatGPT (GPT-3.5) scored only 66% and 65% respectively. This stark contrast highlights the rapid advancements in AI capabilities, with GPT-4 showcasing an emergent ability to grasp and apply complex financial concepts, a significant improvement over its predecessors.

What specific financial concepts were assessed in the tests given to GPT models?

The financial literacy tests evaluated GPT models on a range of essential financial concepts using single-choice questions. These questions were drawn from the 'Big Five' items and the Financial Literacy Baseline Survey. The tests covered fundamental areas of financial knowledge to ensure a comprehensive evaluation of the models' understanding.

What are the potential benefits of using AI like GPT-4 for financial advice?

AI models like GPT-4 have the potential to democratize access to financial advice and empower individuals to make more informed decisions. By providing readily available information and insights, these tools can help people better understand financial concepts and explore different financial strategies. This increased accessibility could be especially beneficial for those who may not have access to traditional financial advisors.

What are the limitations and risks of relying on AI, specifically GPT-4, for financial decision-making?

While GPT-4 demonstrates strong financial literacy, it's crucial to recognize its limitations. Overreliance on AI without critical evaluation could lead to poor financial outcomes. AI tools may not fully understand the nuances of individual financial situations or be able to provide the personalized advice that a human financial advisor can offer. It is very important to consult human financial advisor before implementing plans made using AI tools to ensure plans align with individual circumstances and risk tolerance.

How might the future of financial advice involve AI like GPT-4, and what role will human expertise play?

The future of financial advice likely involves a blend of AI and human expertise. AI models like GPT-4 can provide valuable information and insights, but human financial advisors will continue to play a crucial role in providing personalized advice, considering individual circumstances, and helping clients navigate complex financial decisions. The best approach will likely involve leveraging the strengths of both AI and human expertise to provide comprehensive and effective financial guidance.