Young British Investors

Young British investors trust AI tools more than TV and radio, the press, or social media influencers when it comes to investment advice, according to Financial Conduct Authority research. The survey of 666 18-40-year-olds found that four in five have used AI, with around two thirds reporting occasional or regular use for help with investing.

Investment Advice

Among less experienced investors, AI is the preferred source of investment advice. More than half of respondents trust AI tools for investing, more than TV and radio, press, or social media influencers. This trend is also reflected in recent analysis from Lloyds Banking Group, which found that more than three in four 18 to 24-year-olds have used AI for personal finance, similar to how stats on banking apps show increased usage among young adults.

AI Regulation

However, many people relying on AI models may be misunderstanding the level of protections they have, warns the FCA. Almost half mistakenly believe AI-generated financial information is regulated, while more than a third believe it’s fine to make an investment decision based solely on the outputs of AI. This lack of understanding can lead to unrealistic expectations, as seen in standings of consumer complaints against financial institutions.

Expert Insights

Lucy Castledine, director, consumer investments, FCA, says: "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." Charlotte Hill, partner at law firm Katten Muchin Rosenman UK, adds: "The concern is not the use of AI itself, but the assumption that an AI-generated answer necessarily comes with the same regulatory safeguards as advice from an authorised firm." Graeme Devlin, head of risk, regulation, and compliance at Capco, notes that wealth managers need to adapt to changing consumer expectations, much like how injuries to key players can impact team performance.

The research also highlights the importance of clear information and transparent sources, as well as an easy route to regulated support. As the use of AI in personal finance continues to grow, it is essential for consumers to understand the benefits and limitations of AI-generated advice, and for financial institutions to provide clear guidance and support, such as fixtures for upcoming financial events.