There’s a saying often attributed to Benjamin Franklin that goes: “By failing to prepare, you are preparing to fail.” There’s a flip side to that: planning creates the financial leeway needed for spontaneity, flexibility – and the adventures that money is supposed to buy.
It also avoids panic.
“We’re living in times where – whether we realise it or not – we’re so much more in tune with crises as they unfold in real time,” John Kennedy, Citadel director and head of wealth management, tells Currency. “Information is curated: the more we read about something, the more we get. So it becomes incredibly difficult to put that into a coherent framework that makes sense.”
That is the uncomfortable truth about AI in personal finance: it can generate a tidy answer in seconds, but it cannot tell you which questions matter in your life right now – or stop you from acting on the wrong one.
The danger of herd behaviour
Reyneke van Wyk, partner and head of South Africa and investment management at Stonehage Fleming, says he is already seeing clients arrive with questions that read like AI model outputs. The problem, he says, is the hidden confidence. “We find errors – people need to be very careful. It can be used as a useful tool – but only as a tool. Don’t see that as the final correct answer, because it sometimes isn’t.”
Not only that; you don’t stand out from the crowd when exuberance or fear hits, and you just go with what could be a dangerous trend.
“What I’m slightly worried about is that this may lead to more herd behaviour,” Van Wyk says, describing a scenario where models amplify whatever is already fashionable. “The risk to me is that investors become even more short term in their thinking.”
Herd behaviour, compounded by passive funds that track indices, can push markets further from their fundamentals – on the way up and on the way down.
In Van Wyk’s 25 years of working with ultra-high-net-worth families, the two areas where he believes advisers have added the most value are effective risk diversification and helping clients avoid costly mistakes – what he calls “investment landmines”. Advisers “help prevent the wrong emotional decision – like significantly reducing or selling out of equities after a big market correction. I don’t believe AI is at the stage where it can help you with your emotions and may never get there.”
Building the buffer
Kennedy makes the same case for human advice. “There’s a huge amount of important stuff to process, but unless you make it personal, it almost becomes irrelevant – and more distracting than anything else.” Making it personal means cash needs, tolerance for drawdowns, family dynamics and the kind of plan you can actually stick to when markets rupture or rally.
Central to that plan is a buffer. “In my experience, the one thing that has saved people from making rash, emotional decisions – in the heart of uncertain turbulence – is where they have some form of reserve,” Kennedy says. “Not necessarily liquidity, because even things that are liquid can price down quite dramatically, but some kind of cash buffer.”
The science, as Kennedy puts it, starts with mapping a year’s worth of real expenses – bond costs, living costs, education, travel, entertainment and charitable giving. From there, the target is one to two years held in reserve, so you are never a forced seller. “The buffer is there to stop you hitting the reset button.”
The pandemic made the case plainly. Those who could sustain themselves for 12 to 18 months navigated the uncertainty and rebuilt. Those who couldn’t, faced a complete reset.
Staying constructive, staying disciplined
Despite stretched valuations in parts of the market, Kennedy and Van Wyk remain broadly positive on equities. Kennedy says Citadel is “constructive on risk assets in the year ahead”, including technology companies. “I’d almost argue they’re not companies anymore – they’re countries. They’re so embedded into daily life.”
Van Wyk agrees. “Our positioning remains constructive, emphasising high-quality equities and diversified sources of returns,” he says, citing lower interest rates, stable inflation and continued strong earnings growth.
The caveat is discipline. “We don’t play the high-stakes game at all,” Kennedy says. The focus for those who have built wealth should shift to preservation first – holding a buffer, matching equity exposure to temperament and resisting the urge to chase concentrated positions. “There’s a certain amount of turbulence individuals can tolerate – and it’s not the same for everyone.”
If the AI investment boom disappoints, Van Wyk warns the consequences could be broader. “If you see disappointment there, and you see a weaker labour market and consumer in the US, that is what we need to be mindful of.”
On the professional side, investment houses and hedge funds are deploying AI.
“People are starting to employ AI specialists to help their investment process,” Van Wyk says. Used well, AI is widening the gap between strong and weak active managers – those who harness advanced data analytics, machine learning and alternative datasets are gaining an edge; those who don’t are falling behind.
But Van Wyk is careful to frame its role correctly: “AI isn’t about short-term hype. It’s about understanding how a structural shift gradually shows up in earnings, productivity and long-term returns – often unevenly and over many years.” The implication for investors is that AI matters less as a forecasting tool and more as a force quietly reshaping how companies compete – and which are worth owning.
Not-so-silent lucidity
Beyond markets, Kennedy raises what may be the most overlooked planning risk of all: the assumption that difficult conversations can always wait.
“We project most people’s lives to 95,” he says. “But that doesn’t mean that at 95 you’re completely lucid and can articulate your wishes in the way you want to.” The real sadness, he says, “is when somebody is no longer lucid enough to articulate their wishes to their heirs. Now there’s room for misinterpretation.”
Most people, he observes, spend far more time watching financial markets than asking: “When last did I update this document?” A will is a start. But estate planning – trusts, succession, family business continuity, the conversations that reduce conflict before it starts – requires something more: the willingness to bring adult children around the table while parents are still able to lead the discussion.
“If you don’t do it, you leave behind unnecessary emotion, unnecessary anxiety – and sometimes, at worst, family break-ups,” Kennedy says. “Are you in a position to end well – and end on the right note?” Technology can’t do that.
The simplicity trade-off
Which brings Kennedy to what clients ask for most – and achieve least. “I can’t begin to tell you how many times I’ve heard: ‘I just need to simplify things.’” The problem, he says, is that the actions that follow are usually the opposite: more complexity, more commitments, more things that depreciate and rust and corrode.
Simplicity, he argues, is not a default state. It’s the result of deliberate choices. “What trade-offs am I willing to take? What am I willing to say no to, to get there?” His own test is simple: “At every major decision [ask]: is this making life simpler for me, or making it more complex?”
That question, applied consistently, is perhaps the most useful financial tool of all. Not an AI model, not a market forecast, but a habit of honest self-interrogation that no algorithm has yet learnt to replicate.
“Sometimes planning, in and of itself, creates room for spontaneity,” Kennedy says.
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Top image: Rawpixel/Currency collage.
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