AI is becoming a financial adviser for younger Americans

A new Gallup survey, conducted in collaboration with Edward Jones, reveals that around one-fifth of US adults who sought financial advice in the past year turned to artificial intelligence for guidance. However, only a small fraction of Americans, 3%, trust AI with their financial management expertise, compared to financial advisers, who are trusted by 8 out of 10 US adults.

The survey, conducted in the spring, surveyed adults aged 21 and over and highlighted a disconnect between the resources Americans trust for financial guidance and the ones they actually rely on. While most adults have confidence in financial advisers, only a third who sought advice turned to a professional, while 73% relied on internet research.

Taha Choukhmane, an MIT Sloan School of Management associate professor, recommends using AI to understand financial concepts, such as the stock market and mutual funds. However, he urges caution, stating that AI shouldn't be the sole source of financial advice. Choukhmane advises using AI to explain concepts and then combining this knowledge with trusted sources.

Most Americans have sought financial guidance from various sources, including internet research, financial advisers, AI, family members, news, media, social media, friends, authors, influencers, employers, retirement plan providers, or teachers and professors. Younger generations, such as Gen Z and millennials, are more likely to use AI for financial advice, while older generations, like Gen X and baby boomers, are more likely to seek professional advice.

Despite AI's potential benefits, some financial experts, like certified financial planner Bobbi Rebell, are skeptical about its legal responsibilities. Rebell emphasizes that AI lacks fiduciary responsibility, as it doesn't ask pertinent questions about a person's life circumstances. Ultimately, the decisions made based on AI advice rest with the individual.