Two thirds of younger investors regularly use AI for help with investing, research from the FCA shows.
Among 18-to 40-year-olds who already invest or are considering it, 56% trust AI tools more than TV and radio (47%), the traditional press (46%) or social media influencers (29%).
Four in 5 less experienced investors have used AI for help with investing and two thirds expect to tap into AI more over the next year, the findings revealed.
However, there are misconceptions about whether AI offers investors any protection, with 44% wrongly believing AI-generated financial information is regulated and 38% happy making an investment decision based solely on the outputs of AI. If acting on the advice of AI was to prove detrimental, 32% of the young cohort think they’d get compensation from the Financial Services Compensation Scheme (FSCS) or Financial Ombudsman Service.
More reassuringly 73% acknowledged AI can provide inaccurate information and 86% understood the need to check the sources referenced when using AI.
The FCA reaffirmed that general purpose AI chatbots are not regulated, although tools which are specifically set up to provide financial advice would be likely to fall within the FCA’s remit.
Lucy Castledine, director of consumer investments at the FCA, said: “AI can help you research companies, understand jargon or explore options before you make a decision.
“But you need to understand how you’re protected and continue to use your own judgement. Our InvestSmart website can also help you make more informed decisions.”
