In the past, even a simple financial question may have required a call with your advisor. Today, many questions can be answered in just a few clicks.
Digital tools can be a convenient way to navigate your finances. AI platforms are often capable of answering basic financial questions, and mobile apps can help easily track your accounts. But convenience and privacy don’t always go hand in hand.
Understanding what data you’re sharing – and how the platform uses it – can allow you to use these resources without putting your privacy at risk. In this article, we’ll look at key considerations for using digital financial tools safely, and how your advisor can support you in the process.
AI platforms like ChatGPT and Claude are giving clients a new way to access financial guidance, especially for basic budgeting and investing questions. But they also come with emerging privacy risks.
Depending on a platform’s policies, information shared with AI may be retained and used to train future models. That means anything you upload sits on a company’s servers, where deletion and access policies are often out of your control. Data leaks and hacks can also put your information at risk long after the original interaction.
Beyond direct access to your data, researchers have also demonstrated that some AI models can be prompted to replicate training data verbatim.1 Uploading tax returns or portfolio statements could risk giving third parties access to some of your most sensitive financial information.
AI can be useful when it comes to answering questions that don’t require your financial details. But for questions that require personal context, it’s important to be mindful about what you’re sharing. Uploading personally identifiable information is rarely worth the risk.
Beyond AI, many clients now use financial apps to monitor spending, account balances, and budgeting goals. Properly used, these apps can offer a convenient way to stay on top of everyday activity.
At the same time, clients may be surprised at the scope of information these apps collect. Some apps, especially free ones, may request permission to track location data and contact lists. For example, one report found that trading app Robinhood collected 25 different types of personal data.2
Many apps have reasonable explanations for these permissions, such as fraud prevention. But clients should be cautious about granting broad access to apps with limited history or unclear policies. Reviewing permissions periodically can ensure that you’re granting access that aligns with how you’re using the app.
Some clients only turn to their advisor when they have a specific question about their portfolio or financial plan. But your advisor can also serve as a filter for the financial tools you use each day. If you’re not sure whether to trust a tool, it can be worth a quick email to your advisor.
Many advisory firms also use digital platforms that have been thoroughly vetted for security, featuring secure access and end-to-end encryption. In some cases, clients may be able to use these same platforms for tasks like budgeting and document storage.
Most advisors aren’t cybersecurity experts themselves. But by working with partners who are, firms can provide clients with a curated set of resources that clear a higher bar for security than most consumer apps.
Digital platforms can help clients navigate their finances between advisory conversations. However, they also introduce privacy considerations that are worth taking seriously.
Being selective about the information you share can ensure that you stay in control of your data. In most cases, a few deliberate choices can meaningfully reduce your exposure. These include limiting the amount of personal information you share with AI and being thoughtful about permission settings when using financial apps.
At The Fiduciary Group, helping clients make informed decisions extends beyond portfolios. Should you have questions about the safety of a particular tool, we invite you to contact our office.
1 Financial Times, AI’s ‘memorisation’ problem: the novels it can’t forget Link
2 Yahoo Tech, Watch out - these are the personal finance apps most likely to steal away your personal data Link