How AI tools are reshaping financial advice for young professionals but require smarter prompts and critical thinking skills. (Getty Images)
As artificial intelligence tools become embedded in everyday decision-making, young professionals and students are increasingly turning to them for guidance on personal finance.
From budgeting tips to retirement planning, generative AI platforms are being used as quick, accessible advisors. However, experts caution that the quality of advice depends not just on the tool itself, but on how effectively users communicate with it.A report by CNBC highlights that crafting the right prompt—essentially the instructions given to AI—can significantly influence outcomes. For those entering the workforce or planning long-term financial goals, this emerging skill of “prompt engineering” is becoming a valuable addition to their career toolkit.The emerging skill of prompt engineering“I think that there’s a real art and science to prompt engineering,” said Andrew Lo, director of MIT’s Laboratory for Financial Engineering, during a recent academic presentation. His observation underscores a growing reality: knowing how to ask the right questions is as important as accessing the right technology.For students in commerce, finance, and even non-finance streams, this skill is fast becoming relevant.
Prompts like “How should I retire?” may give generic recommendations. On the other hand, detailed inputs that involve setting financial objectives, risk appetite, and constraints can provide more relevant recommendations.Where AI excels—and where it falls shortAI-based software is most useful in demystifying general financial principles. For instance, AI can clarify what diversification is, what investment options exist, or how one might manage their taxes.
This makes them useful for learners building foundational knowledge.However, as CNBC reports, experts warn against relying on AI for precise financial calculations or personalised tax assessments. Lo pointed out that AI struggles with highly specific numerical analysis and may produce confident-sounding but incorrect answers due to algorithmic “hallucinations.”“When it comes to very, very specific calculations of your own personal situation, that’s where you have to be very, very careful,” Lo told CNBC.A generation turning to AI for adviceThe trend is already visible among younger users. Research shows that a considerable number of millennials and Gen Z people are making use of AI for financial advice and taking action accordingly. These developments raise some serious concerns about digital literacy and critical thinking.Considering students who will join the workforce in finance, consulting, or any other similar profession, it is imperative that they learn about the strengths and weaknesses of AI.How to write better promptsIt is recommended that good prompts should be specific, contextualized, and structured. Instead of asking broad questions, users should define their scenario clearly—outlining objectives, constraints, and expectations.Financial planner Brenton Harrison emphasised that even the most advanced AI models cannot compensate for poorly framed queries. The principle is simple: better inputs lead to better outputs.Another useful strategy, as highlighted in the CNBC report, is “reverse engineering” prompts. People can ask AI what kind of question should have been asked that led to the right answer so that next time they can improve their way of questioning.It’s all about critical thinkingWhile the above features are amazing, people should not rely entirely on artificial intelligence in decision making because some things may require human judgement especially complicated issues involving finances. It is advisable to verify the sources of information provided by AI, clarify doubts, and cross-check the results.This means that students and young professionals should know that AI could be a great learning tool but it’s not a definite authority. It is important to be able to question, analyze, and confirm the results of work done by AI.
