According to a survey by Gallup, in partnership with financial services firm Edward Jones, people in the US largely don’t trust the responses of AI giants when it comes to dealing with their finances.
Around one in five Americans have turned to AI for financial advice, yet only roughly three in 10 have “a great deal” or “some” confidence in the technology for giving good advice. Only 3 per cent of respondents said they had “a great deal” of trust in the tech.
In contrast, eight in 10 respondents said they had “some” confidence in financial advisers.
Still, cost and other restrictions mean that despite the lack of trust, the majority of users don’t see financial advisers, with around 73 per cent saying that they instead researched themselves. In contrast, only one in three sought out professional assistance.
Financial advisers and professionals warn against using AI for financial advice, due to inaccuracies and hallucinations.
Despite this, some financial firms are creating AI tools that can provide financial advice.
Online investment firm Stockspot’s chief executive, Chris Brycki, said human oversight is important when giving financial advice, due to regulatory and compliance requirements.
“The biggest constraint [to using AI agents] isn’t the technology. It’s the regulatory, compliance and record-keeping framework that sits around personal advice,” Brycki told The Australian Financial Review.
AI also can’t provide the personal angle that takes into account financial situations, objectives, and goals, as well as other factors that contribute to a recommendation.
“In a regulated environment, human oversight is important because someone needs to be accountable for the advice process and client outcome. That means it’s not enough for an AI agent to produce an answer. It needs to be able to demonstrate the reasoning, the inputs used, the assumptions made, the compliance checks performed and maintain a full record trail that would stand up to regulatory scrutiny,” Brycki said.
However, Taha Choukhmane, an associate professor at MIT Sloan School of Management, said that on a personal level, AI should be used for preliminary findings and combined with professional assistance.
“I would encourage people to use AI to explain and define,” Choukhmane said.
“If you’re interested in knowing what the stock market is, what the difference between a mutual fund and an index fund is. Using AI to explain these concepts can be very useful because it can empower people to get the most out of these methods.”
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