App stores are full of investing apps that call themselves "AI-powered." Some manage your money, some explain the market, some sell stock picks, and a few are outright scams that borrow the language of AI. The label tells you nothing; the answers to seven questions tell you almost everything.
Run any AI investing app through this checklist before you give it money, your brokerage login, or more than ten minutes of your attention.
1. Does it explain, advise, or trade?
This is the question that sorts every app into a category, and each category carries a different kind of risk.
- Explains: research assistants and learning tools. You make every decision. Worst case, you learn something wrong.
- Advises: stock-pick and signal apps. You decide whether to follow. Worst case, you pay to lose money.
- Trades: robo-advisors and auto-trading apps. The app makes the decisions. Worst case, your money is managed in a way you don't understand.
A beginner should know which of the three they're signing up for before doing anything else.
2. What does it cost — as a percentage of your balance?
Fees look small in dollars and enormous in percentages on a small account. Convert everything to a yearly percentage of what you'll actually invest:
| Account size | $10/month app | $30/month app | 0.25% yearly fee |
|---|---|---|---|
| $1,000 | 12.0% a year | 36.0% a year | 0.25% ($2.50) |
| $5,000 | 2.4% a year | 7.2% a year | 0.25% ($12.50) |
| $25,000 | 0.5% a year | 1.4% a year | 0.25% ($62.50) |
A flat subscription on a $1,000 account is a hurdle almost nothing clears. For comparison, a broad index fund like VOO charges about 0.03% a year. If an app can't beat that after its own fees, it's costing you money to use.
3. Where does its information come from?
An AI is only as good as what it reads. Look for an app that tells you:
- where prices and financial figures come from, and how delayed they are;
- which news articles an explanation is based on, with links you can open;
- when the information was last updated.
Every AI explanation on IntegralStocks lists its sources for exactly this reason — our data sources page explains how. An app that gives confident answers with no sources is asking you to trust a black box.
4. Does it show you losing trades?
Any app can show a screenshot of a pick that doubled. Ask to see the full record, including losers, over at least a year — and compare it with what simply holding an S&P 500 fund did over the same period. If an app only shows winners, it is marketing, not a track record.
Then do the math from our AI investing for beginners guide: a high "win rate" can still lose money if the losing trades are bigger than the winning ones.
5. Is the company registered, and does it need your login?
Firms that manage money or give personalised investment advice in the US generally have to register with the SEC or state regulators, and brokerages are members of FINRA. You can look a firm up on FINRA's BrokerCheck or the SEC's Investment Adviser Public Disclosure site in a couple of minutes.
A research or learning app has no reason to need your brokerage username and password. If one asks, stop.
6. Does it push you to trade more?
Watch for streaks, confetti, countdown timers, "hot" lists and notifications urging you to act now. Frequent trading helps an app's engagement numbers; for most beginners it hurts returns through costs, taxes and bad timing. A good tool should make you calmer and slower, not faster.
7. Can you practice without real money?
The best way to judge any approach — AI-assisted or not — is to try it with fake money first. A paper trading simulator with live prices lets you follow an app's ideas for a month and see what would have happened, at zero cost. Our comparison of paper trading vs real trading covers what that practice does and doesn't teach.
Red flags: walk away if you see these
- Guaranteed or "consistent" returns of any size
- Pressure to deposit quickly, or bonuses for recruiting friends
- Requests to move money into crypto wallets or unfamiliar platforms
- Testimonials and screenshots instead of a full, verifiable track record
- No company name, address or registration you can check
- An "AI" that will only explain itself after you pay
A worked example
Imagine two apps. App A costs $25 a month and sends three stock picks a week with a "71% win rate." App B is free, explains why each stock on your watchlist moved with links to the news, and includes a simulator.
On a $3,000 account, App A's subscription is $300 a year — a 10% hurdle before its picks earn you anything — and its win rate says nothing about the size of its losses. App B can't make you money directly, but it costs nothing and makes every decision you take yourself better informed. For a beginner, B is the better tool almost every time, and A should prove a full, audited record before it gets a dollar.
The short version
Know whether an app explains, advises or trades. Convert its price to a percentage of your balance. Demand sources and a full track record. Never hand over a login to something that only needs to teach you. And test any idea in a simulator before you test it with your savings.