Futuristic cityscape with AI providing personalized financial advice.

Is Your Robo-Advisor About to Be Replaced? GPT-4's Financial Literacy Game Changer

Jordan Keane in Business & Economy December 2025 • 4 min read.

"ChatGPT-4 Achieves Near-Perfect Financial Literacy: A Preliminary Test of How AI is Revolutionizing Financial Advice and Empowering Everyday Investors."

The financial world is on the cusp of a significant transformation, driven by advancements in artificial intelligence. The introduction of ChatGPT, a conversational variant of the Generative Pre-Trained Transformer (GPT) model, has sparked considerable public interest in large language models (LLMs). While initial assessments of earlier GPT models revealed mediocre quantitative reasoning skills, the latest iteration, GPT-4, demonstrates remarkable progress, particularly in the realm of financial literacy.

Imagine a world where sophisticated financial advice is readily available to everyone, regardless of their income or financial knowledge. This vision is rapidly becoming a reality as AI-powered tools like GPT-4 begin to exhibit near-expert-level understanding of complex financial concepts. This article explores the implications of GPT-4's financial literacy and the potential impact on individuals, robo-advisors, and the broader financial industry.

This analysis is based on a recent study that assessed the ability of GPT models to serve as financial robo-advisors. The study's findings shed light on the potential for AI to democratize access to financial advice, while also raising important questions about advice utilization and the risk of over-reliance on these technologies.

GPT-4's Leap in Financial Literacy: What Does It Mean for You?

Futuristic cityscape with AI providing personalized financial advice.

The study reveals a stark contrast in financial literacy scores between different GPT models. GPT-3.5-based models, Davinci and ChatGPT, achieved scores of 66% and 65%, respectively, on a financial literacy test. While these scores surpass a baseline of 33% (expected from random guessing), they indicate limited proficiency in financial matters. However, ChatGPT-4 achieved a near-perfect score of 99%, demonstrating a significant leap in financial understanding.

This breakthrough suggests that financial literacy is becoming an emergent ability of state-of-the-art AI models. What does this mean for the average person? It implies that tools like GPT-4 have the potential to provide accurate and reliable financial guidance on a wide range of topics, from basic budgeting to investment strategies.

Democratization of Financial Advice: AI-powered tools can make financial advice accessible to individuals who may not be able to afford traditional financial advisors.
Increased Convenience: Users can obtain financial guidance instantly and conveniently through conversational interfaces.
Personalized Recommendations: AI models can analyze individual financial situations and provide tailored recommendations.

While the potential benefits are substantial, it's crucial to acknowledge the inherent risks associated with relying solely on AI for financial advice. The study highlights the importance of understanding how people utilize advice from large language models and the potential for over-reliance.

Navigating the Future of AI-Powered Financial Advice

The rise of AI-powered financial tools presents both opportunities and challenges. While GPT-4's impressive financial literacy scores hold great promise for democratizing access to financial advice, it's essential to approach these technologies with a balanced perspective. As AI continues to evolve, individuals should prioritize financial education, critical thinking, and a healthy dose of skepticism. By embracing a combination of AI assistance and human expertise, we can harness the power of technology to achieve our financial goals while mitigating the risks of over-reliance and misinformation.

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.

This article is based on research published under:

DOI-LINK: 10.1016/j.frl.2023.104333,

Title: Gpt Has Become Financially Literate: Insights From Financial Literacy Tests Of Gpt And A Preliminary Test Of How People Use It As A Source Of Advice

Subject: cs.cl cs.ai cs.cy econ.gn q-fin.ec

Authors: Paweł Niszczota, Sami Abbas

Published: 31-08-2023

Everything You Need To Know

How does GPT-4's financial literacy compare to earlier GPT models and what does this mean for everyday investors?

The advancements in financial literacy between different GPT models are striking. GPT-3.5 based models, such as Davinci and ChatGPT, scored 66% and 65% respectively on a financial literacy test. However, ChatGPT-4 achieved a near-perfect score of 99%. This indicates that GPT-4 has a substantially better understanding of financial concepts compared to its predecessors. For everyday investors, this suggests that GPT-4 has the potential to provide more accurate and reliable financial guidance on various topics, from budgeting to investment strategies, potentially democratizing access to sophisticated financial advice.

What are the key benefits of using AI like GPT-4 for financial advice, and how does this compare to traditional methods?

The primary benefits of using AI like GPT-4 for financial advice include the democratization of financial advice, increased convenience, and personalized recommendations. AI-powered tools make financial advice accessible to individuals who may not be able to afford traditional financial advisors. Users can obtain instant financial guidance through conversational interfaces. AI models can analyze individual financial situations and provide tailored recommendations, leading to more relevant and effective advice. This contrasts with traditional methods, which often involve costly consultations with financial advisors who may not always offer personalized or readily accessible advice.

In the context of this information, what are the potential risks of relying on AI-powered financial tools like ChatGPT-4?

One of the main risks of relying solely on AI-powered financial tools such as ChatGPT-4 is the potential for over-reliance. Although GPT-4 demonstrates impressive financial literacy, it's crucial to recognize that it's an AI and lacks the human element of critical thinking, emotional intelligence, and understanding of personal circumstances that a human financial advisor possesses. Over-reliance could lead to poor financial decisions, as users might not fully understand the advice or consider all relevant factors. Additionally, there's a risk of misinformation or the inability of AI to handle complex or unique financial situations.

How could GPT-4's capabilities reshape the landscape of financial advice and impact robo-advisors?

GPT-4's advanced financial literacy could significantly reshape the landscape of financial advice. It can challenge traditional robo-advisors by offering more sophisticated and personalized guidance. While existing robo-advisors provide automated investment management, GPT-4 has the potential to offer comprehensive financial planning, including budgeting, debt management, and tax planning. This may lead to a more competitive market, forcing robo-advisors to improve their services or differentiate themselves. The rise of AI-powered tools might also result in hybrid models, where human financial advisors leverage AI to enhance their services and provide better client support.

What steps should individuals take to navigate the future of AI-powered financial advice effectively, considering the capabilities of GPT-4?

To effectively navigate the future of AI-powered financial advice, individuals should prioritize financial education, critical thinking, and a healthy dose of skepticism. While tools like GPT-4 can be valuable, it's essential to understand the underlying financial principles and concepts. Individuals should critically evaluate the advice provided by AI, considering the source and potential biases. It's advisable to use AI assistance as a tool to supplement human expertise and not to replace it entirely. By adopting a balanced approach that combines AI and human insights, individuals can harness the power of technology to achieve their financial goals while mitigating potential risks.