When it comes to personal finance, the two most crucial aspects are in the name itself—personal and finance. A famous quote about successful investing is that it’s 80 percent personalisation and only 20 percent financial.
A quick Google search or an AI chatbot can tell you which stocks or mutual funds have performed well. This information is available to all at the click of a button. But if investing were just about picking the best stocks or funds, why do so few people create long-term wealth?
A recent report from the Securities and Exchange Board of India revealed that over 50 percent of investors don’t stay invested for even 12 months. And this was during a bull market when investment returns were largely positive. In a downturn, the numbers would be even worse. This raises an important question: Can AI-driven chatbots truly replace human financial advisors for long-term wealth creation?
The limits of AI in financial advice
Think of it like this: You wouldn't ask a doctor for the most popular medicine without explaining your symptoms, would you? Yet this is analogy exactly suits what a chatbot or an internet search does when it comes to investing. It provides generic answers based on algorithms, with little to no understanding of an individual’s financial situation, risk appetite, behaviour or goals.
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Successful investing isn’t just about where to invest, it’s about why and how. As cricketer Mahendra Singh Dhoni put it, "When you are under pressure, you have to trust the process for the right outcome."
A financial plan is like a well-executed cricket strategy—it’s not just about scoring runs quickly but staying on the pitch long enough to win the game. Great returns are an outcome of a strong investing process and not just good fund selection.
The role of process and behavioural coaching in wealth creation
Wealth isn’t built just by selecting the right investments. It requires patience, resilience and behavioural discipline. These qualities develop through:
• A structured investment process prioritising discipline over speculation
• Collaboration with expert advisors who understand financial goals
• A personalised roadmap based on unique financial situations
• Managing behavioural biases and emotional tendencies in investing
• Focusing on long-term financial success over short-term market movements
AI chatbots, despite their efficiency, cannot provide this level of personalisation. They can offer information but they can’t help build the conviction needed to stay invested during turbulent times.
How emotions of fear and greed influence investing decisions
Today’s age of Information overload makes it easy to fall into the trap of greed and fear. Many investors enter markets when stocks are rising, chasing quick gains, only to panic and sell when the tide turns.
Unfortunately, many financial products are sold by leveraging these emotions. Fear is used to push unnecessary insurance policies, while greed is used to sell high-risk stock market products. The difference between a financial advisor and a salesperson lies in the process—a good advisor prioritises understanding individual needs before recommending tailormade solutions.
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A well-structured investment process helps investors make smart investing decisions based on:
• Documented cash flows and personal finance ratios
• Realistic expectations enabling rational decisions
• Avoiding impulsive, emotionally-driven choices
• Staying committed to financial goals despite market fluctuations
• Investing with purpose rather than chasing trends
Can AI replace human advisors? Not yet!
While technology makes investing more convenient and cost-efficient, it cannot understand human emotions or behavioural patterns. AI chatbots assist with transactional tasks like portfolio tracking and answering factual queries. But can they:
• Guide investors through emotional biases during market downturns?
• Help navigate complex life changes affecting financial goals?
• Provide holistic financial coaching tailored to individual needs?
That day is still way off.
Successful investing goes far beyond just investment selection—it’s about behavioural management and structured decision-making enabled by:
• Hyper-customisation based on personal financial goals
• Human collaboration to help investors stay on track
• Long-term wealth creation through a disciplined investing framework
AI can complement human advisors, but when it comes to navigating the complexities of wealth management, a personalised, human-centric approach will always be more effective than an algorithm.
The future: A bionic approach to investing
The future of investing lies in a bionic model, combining AI-driven insights with expert-led customisation. A powerful technology-enabled, expert-driven approach ensures investment decisions are both data-informed and behaviourally aligned.
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Long-term wealth creation requires more than just information—it demands a disciplined investment process, behavioural coaching and strategic decision-making. While AI can support certain aspects of investing, human expertise remains irreplaceable when it comes to managing emotions, navigating uncertainties and building wealth with purpose.
A well-structured bionic platform—leveraging both technology and expert insights—will play a crucial role in helping investors stay committed and achieve financial success.
The author is co-founder & CEO of FinEdge.
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