"All financial innovation is generally there to solve a problem," says professor Andrew W. Lo. "If you've got some long-dated obligations, you want long-dated assets to mature and pay them off." Lo, speaking generally and not about Fox Hedge, adds that complex ways of engineering long-dated investments could end up creating their own problems if they become common.

"We're on the cusp of a pretty significant change in how people are able to use AI to help manage their finances," said professor Andrew W. Lo. "I don't think these apps are all ready for primetime, but nonetheless, there is a sea change between today's AI finance applications and what existed even two years ago."

Professor Andrew W. Lo believes that generative AI is fast approaching the capacity to parse complex market dynamics, weigh long-term risks, and earn the kind of trust typically reserved for human advisers. "This could be in the form of the so-called agent AI working on our behalf and making decisions on our behalf in an automated fashion. I believe that within the next five years we're going to see a revolution in how humans interact with AI," said Lo.

"One of the biggest challenges that we face in finance is financial advice," said professor Andrew W. Lo. "How do we deal with various different investors' needs to manage their portfolio to achieve certain objectives."

This article examines the capabilities and limitations of AI tools in retirement planning, highlighting the work of Andrew Lo and Jillian Ross in which they are exploring whether large language models like ChatGPT can provide reliable financial advice to everyday investors.

At the EmTech AI conference hosted by MIT Technology Review, researchers and industry leaders discuss how organizations are evaluating the return on investment (ROI) from generative AI initiatives.

In this the first of two pilot episodes of Chalk Radio with video, Professor Andrew W. Lo, who teaches finance at MIT’s Sloan School of Management, knows that many people find financial matters perplexing and scary. Lots of us don’t have a good head for numbers, and besides, how can one get advice and make sound decisions when it’s taboo to discuss one’s finances at all? That’s where a financial advisor is useful–someone who understands the concepts, can crunch the numbers, and has a fiduciary responsibility to look out for your best interests. For many people, hiring a financial advisor might be a financial impossibility, but Prof. Lo and his colleagues are working to develop an AI financial advisor that not only gives ordinary people access to sound financial advice, but acts with real fiduciary responsibility. Large language models can’t do this yet, he says, but the technology is developing fast. Other topics he touches on in this episode include the outsized influence of finance on drug development and global decarbonization and the equally outsized influence of teachers on their students–he names many who changed his own life, from his third-grade teacher in Queens to his professors at college and graduate school.

ChatGPT can help with a lot of things, from searching to generating images to planning outlines. But when it comes to financial advice, it's probably best to leave it to the (human) experts.

Nearly half (47%) of respondents to an Experian survey from October 2024 said they had tried using AI chatbots for financial advice — but a new study from the broker analysis site, Investing in the Web, found that tools like ChatGPT might not be very good at it.

One in five Americans is making 2025 the year they save more money, and there is a growing trend of asking generative AI technology for advice on how to achieve personal finance goals. But is using ChatGPT or Gemini to improve your personal balance sheet the right move? Experts say it’s complicated.

Economic challenges like inflation, recession fears and geopolitical uncertainty are top of mind for many as 2024 draws to a close. A recent Deloitte report found that 73% of respondents globally are concerned about rising prices, reflecting the financial strain on households around the world. Against that backdrop, generative artificial intelligence is emerging as a popular tool in personal finance, reflecting the evolving ways in which people think about budgeting, investing and financial planning.

However, while the technology is advancing rapidly, experts caution that these AI tools should complement — not replace — traditional strategies.

Arynton Hardy, a wealth manager in Los Angeles, uses artificial intelligence daily.

"Almost every single meeting I have with a client, I utilize an AI summarizer that gives me notes, gives me follow-ups, gives me to-dos," Hardy said. His employer, Savvy Wealth, is a tech startup focused on providing AI innovations to its growing roster of financial advisors and high-net-worth clients.

Hardy said AI tools regularly save his team hours on data entry, portfolio monitoring, and other back-office tasks, giving him more time to meet with clients.

If I asked Dall-e to draw me a picture of a cat juggling nine balls in the style of a French impressionist, it would do so in seconds. And once done, that painting would be far better than anything I could possibly hope to do. But, it wouldn’t be perfect – because it would appear that Chat GPT’s artistic side is too right-brained to actually count balls.

Artificial Intelligence (AI) is advancing at an unprecedented pace, transforming various industries and redefining traditional roles. The mortgage intermediary profession will be no exception. As AI systems continue to develop, they are outperforming humans in specific tasks, compelling professionals to rethink their strategies and adapt to these technological shifts. If someone invents the steam powered weaving loom, learn how to work the loom, don’t be a weaver.

A new MIT study by professor Andrew W. Lo and co-author suggested that while large language models (LLMs) like ChatGPT are fairly new developments for financial advisors, they could be trained to adapt to simulate both the predictive and empathetic behaviors of human advisors. "To achieve performance that rivals the best human advisors, we will need to incorporate some notion of selection, evolution, and fitness into the ongoing training of LLMs," the study said, and, "if LLMs can be made safer and more robust, they have the potential to transform our financial lives."

By securely aggregating sensitive data from cyber-attacks, the SCRAM platform from MIT CSAIL can quantify an organization’s level of security and suggest what to prioritize.

MIT has debuted a new platform designed to help the enterprise decide how to invest in cybersecurity.