By Philippa Billings, Chief Advice Officer, Otivo
Nearly two thirds of Gen Z Australians told ASIC's researchers they trust AI platforms for money advice, and 63% are confident in the accuracy of what comes back. Confidence at that level would be reasonable if these tools were built to be relied on. Mostly they weren't, and the risk isn't the one people expect. It isn't that AI gives obviously bad answers. It's that a wrong answer and a right one look identical.
AI financial advice is as safe as the licence behind it. A licensed service providing personal advice under an AFSL carries a best interests duty, a documented record and access to external dispute resolution. An unlicensed general-purpose tool carries none of those, so the safety question is really a licensing question.
What are the actual risks of using AI for financial decisions?
Three, and only one of them gets discussed much.
The first is accuracy, and specifically currency. Australian super and tax settings are indexed and move on set dates. The general concessional contributions cap, which covers employer super guarantee, salary sacrifice and personal deductible contributions together as one combined limit, stepped from $30,000 to $32,500 for 2026-27. A model working from older material will state the superseded figure with complete confidence. ASIC's Moneysmart has also warned that AI-generated financial information may not suit the Australian context at all, since much of the underlying material is written for other countries.
The second is fit. A general-purpose tool knows what you typed and nothing else. It can't distinguish a 26-year-old with no emergency savings from a 62-year-old three years out from retirement unless told, and it has no obligation to weigh that properly even when it is.
The third is the one that only shows up later. If an unlicensed answer costs you money, there is no licensee to answer for it, no external complaints scheme, and no compensation arrangement. The loss stays where it landed.
The seven checks before acting on an AI answer
None of these require any technical knowledge, and together they separate a useful answer from a costly one.
- Is there a licence number? An Australian Financial Services Licence holder displays one. Without it, whatever you're reading isn't personal advice, however tailored it reads.
- Does it know your position, or only what you typed? Advice computed from data a provider holds and can verify behaves differently from advice assembled out of what you happened to remember.
- Is the figure current for this financial year? Caps, thresholds and pension rates are indexed. A number without a financial year attached to it is worth checking against the ATO or Services Australia directly.
- Is it Australian? Offset accounts, preservation age and concessional contributions have no equivalent in most of the material these models learned from.
- What did you hand over to get the answer? Balances, income and account details entered into a public tool leave your control.
- Is there a record? Advice you can review in six months is a different product from a chat window that closed.
- Who do you complain to? An AFS licensee has an internal process and belongs to the Australian Financial Complaints Authority. If you can't name the answer to this one, that's the answer.
Is it safe to give an AI tool your financial information?
It depends entirely on which tool. Moneysmart's guidance encourages caution about sharing unnecessary personal or financial information with publicly available AI tools, and the reasoning is straightforward: once information is entered into a public system, you no longer control where it sits or what it's used for.
The regulatory backdrop is worth knowing even though it isn't aimed at individuals. In October 2024 the Office of the Australian Information Commissioner published guidance on the use of commercially available AI products, confirming that the Privacy Act 1988 and the Australian Privacy Principles apply to all uses of AI involving personal information. As a matter of best practice, it recommended that organisations not enter personal information, and particularly sensitive information, into publicly available generative AI tools, because the privacy risks are significant and complex. That recommendation is directed at businesses. The underlying logic applies just as neatly to a person typing their super balance into a chat box.
A licensed provider sits in a different position, because it is bound by the Privacy Act in how it collects, holds and uses your information, and it has a regulator and a complaints scheme attached to that obligation.
Why AI makes financial scams harder to spot
This is the safety risk that has moved fastest, and it's distinct from the question of whether a chatbot's answer is any good.
ASIC warned in August 2026 that scammers are using generative AI to build entire networks of deception, with deepfake videos of public figures reinforced by spoof websites, fabricated news articles and fake reviews designed to survive exactly the kind of quick search a cautious person would run. The regulator's point was that polished content and convincing testimonials are no longer evidence of anything. Earlier in 2026 it also warned about AI-generated social media advertising promising effortless returns from automated trading.
ASIC's practical guidance is to verify a licence holder's name and number against its own registers rather than accepting what appears on a site, since scammers routinely claim licences they don't hold or use someone else's number.
So when is AI safe enough to rely on?
When it's being used to understand rather than to decide, or when a licensee is standing behind it. Those are the two safe configurations, and Moneysmart's guidance is unusually balanced on the first: it names summarising complex material, answering general questions and suggesting what to research next as genuinely good uses.
That's not a small category. Many Australians find the barrier to a decision isn't the decision itself, it's not knowing which question matters most. A general-purpose tool is good at that and poor at the step after it. ASIC's framing is that AI output is worth checking against trusted sources before anyone acts on it, and that no single source, AI or otherwise, is a sound basis for a financial decision on its own.
Frequently asked questions
Can AI give wrong financial advice without me noticing?
That's the central risk. These models produce an answer in the same confident register whether or not the underlying rule is right, and Moneysmart has warned they can invent detail with no basis in fact. Hedging is normally the signal a reader uses to spot a shaky answer, and it isn't there. Checking any specific figure against the ATO, Services Australia or ASIC's Moneysmart takes a minute and catches most of it.
Is licensed AI financial advice safer than a general-purpose chatbot?
It carries protections a general-purpose tool doesn't. Personal advice under an AFSL is subject to the best interests duty in section 961B of the Corporations Act, documented as a record, and covered by internal complaints, access to AFCA and compensation arrangements. ASIC's Regulatory Guide 255 also expects a digital advice tool to be built so it declines to advise where the scope is too narrow to serve the client properly.
How do I check whether an AI financial service is licensed?
Look for an Australian Financial Services Licence number on the provider's site and verify it against ASIC's professional registers rather than taking it at face value. ASIC has warned through 2026 that scammers misuse licence details, including by quoting another entity's number, so the check is worth doing against the register itself.
Where does Otivo sit?
Otivo provides digital advice under AFSL and Australian Credit Licence No. 485665, which means it answers to all seven checks above rather than to a terms-of-service page. Its advice runs on the member's own balances, income, debts and goals, it's documented, and it's built to return "not yet" where the numbers don't support acting, which is a thing an unlicensed tool has no reason to do. If you'd like to see licensed advice run on your own position, the retirement planning module and the debt advice tool both start there. For genuinely complex circumstances, a licensed financial adviser remains the right escalation.
Sources
- ASIC Moneysmart, AI and money decisions, 23 March 2026. moneysmart.gov.au/online-safety/ai-and-money-decisions
- ASIC, Moneysmart publishes tips on using AI for financial issues, 23 March 2026. asic.gov.au
- ASIC media release 26-195MR, ASIC warns scammers are using AI to spin vast webs of deception. asic.gov.au
- OAIC, Guidance on privacy and the use of commercially available AI products, 21 October 2024. oaic.gov.au
- ASIC, Regulatory Guide 255: Providing digital financial product advice to retail clients, August 2016.
- Corporations Act 2001 (Cth), s961B.
Disclaimer
The information in this communication is current as at September 2026 and has been prepared by Otivo Pty Ltd ABN 47 602 457 732, AFSL and Australian Credit Licence No. 485665. This content is general information only and has been prepared without taking into account your objectives, financial situation or needs. It is not personal financial or taxation advice and should not be relied on as such. Before acting on any information, you should consider its appropriateness having regard to your personal circumstances. This material must not be reproduced in whole or in part, or posted on any social media platform, without the prior written consent of Otivo Pty Ltd.