AI as a financial advisor? 31% of investors say yes
Artificial intelligence (AI) has made huge strides in recent years, and its use in a variety of fields continues to grow. One of these areas is finance, where some investors are considering AI to help them with their investment decisions.
According to a recent survey by the Certified Financial Planner Board of Standards (CFP Board), 31% of investors would be willing to take financial advice from an AI without verifying these recommendations with another source.
The pros and cons of AI as a financial advisor
The use of artificial intelligence has several advantages for investors. For a start, AI can process large amounts of data quickly and efficiently, providing valuable insights into market trends and investment opportunities. From moreAI programs are available 24/7, which can be particularly useful for those wishing to follow international markets.
But there are also potential drawbacks to using artificial intelligence as a financial advisor. One major problem is that generative AI which creates new content such as financial advice, depends on data gathered from the Internet, and these sources of information are not always reliable. As a McKinsey & Co report points out, the quality of results depends on the quality of the model used by the AI. Thus, financial advice provided by an AI may not be entirely trustworthy.
Young investors wary of AI
It is interesting to note that young investors seem to be more wary about AI-delivered financial advice than their older counterparts. According to the CFP Board survey, 62% of investors aged 45 and over more say they are “very satisfied” with receiving financial advice from generative AI, compared with just 38% of investors under 45.
This mistrust may be partly explained by the fact that younger investors are often less experienced, and therefore need human guidance in their financial choices. On the other hand, older investors, who are generally those with sound financial more complex and require tailored advice, may be more inclined to trust AI recommendations.
“It’s really every man for himself out there.”
Kevin Keller, CFP Board CEO
Ultimately, we think it’s critical for investors who want to leverage artificial intelligence for financial advice to verify the recommendations they receive. As CFP Board CEO Kevin Keller points out in an interview with cnbc, investors should take a “trust but verify” approach when using AI to make financial decisions.
There are advantages and disadvantages to using AI as a financial advisor. While AI can provide valuable information and be available all the time, it is important to consider the limitations of this technology and not to rely on it blindly. Verifying AI recommendations and consulting other sources of information can help investors make informed decisions and minimize the risks associated with their financial choices.