Why Your Financial Plan Still Needs a Human Touch
I’ve gotten pretty good at recognizing AI-generated emails. A client sent me one recently about their portfolio — formal, thorough and missing the person I knew on the other end. I asked about it.
Sure enough, they had fed their account information into an AI tool, asked a few questions and forwarded the result. They were thoughtful and proactive. They were also outsourcing a conversation that I would have preferred to be between the two of us.
I’m not here to argue that AI isn’t useful. It is. I use it myself, and I’d encourage clients to use it too — as a starting point. It’s a handy way to educate yourself and a tool for thinking more clearly before a conversation.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
But there’s a difference between a tool that helps you think and one that thinks for you. In financial planning, that difference matters enormously.
What AI does well, and where it falls short
AI can model a real estate transaction. It can simplify dense information. It can tell you the fastest path out of debt or project the growth of a retirement account over 30 years. It solves the blank-page problem: When you don’t know where to start, it gives you somewhere to begin.
What it doesn’t have is intuition, emotion, common sense or imagination. In my experience, those four things are what determine whether a financial plan actually works for the person who has to live it.
Consider something as straightforward as a mortgage. When interest rates were near historic lows, the math was clear: Keep the debt, invest the difference, earn a greater return. That spreadsheet was right.
But for some clients, the idea of owning their home outright matters more than any rate-of-return calculation. It’s visceral. It’s about security and identity and a feeling that no model captures.
I’ve learned not to fight it. When someone is choosing between two good options and one of them speaks to something deep, the right answer isn’t always the optimal one.
The machine doesn’t know you
Risk tolerance is another place where this shows up clearly. A portfolio model can tell you that, based on your age, timeline and assets, you should be fully invested in equities. And maybe you should.
But if you’re the kind of person who can’t sleep when markets fall — who will sell at exactly the wrong moment because the pain has become unbearable — that “optimal” allocation was never right for you to begin with. Human nature, in my experience, is undefeated. The best financial plan is the one you can actually live with.
I’ve also seen AI confidently deliver wrong answers, with no indication that anything was off, on things like tax situations, withdrawal strategies and rules that vary by state or year. The output is only as good as the question, and most people don’t know what they don’t know.
That’s not a knock on the technology. It’s a reminder that for high-stakes decisions, accuracy isn’t enough. You also need judgment.
And then there’s the kitchen table. So many of the financial decisions that shape a family’s life happen in conversation — over a meal, in the car, in the quiet after the kids go to bed. Those conversations draw on decades of shared history.
You know what makes your spouse nervous and what makes them feel safe. You know what your parents modeled, what worked and what didn’t, and what you want to do differently.
The machine doesn’t know any of that. It can’t ask the right follow-up question, sense that something is being left unsaid, or recognize that the numbers are only half the story.
A partner, not a substitute
Here’s what I’ve come to believe: AI works best as a partner in this process, not a replacement for it. Use it to educate yourself, clarify your thinking, and to prepare for the conversations that actually matter.
But before any decision that carries real weight, like a retirement, an inheritance or a major life transition, bring it to someone who knows not just your portfolio, but your history, your family, your values, and what you actually want your money to do for your life.
The goal of financial planning has never been to produce the most mathematically elegant outcome. It’s to help people build lives they feel good about. That work has always required something a machine can’t replicate: The ability to understand a person, in full, and help them move toward what they actually want.
AI can build a budget. It can’t build a life. That part is still ours.
