For money management advice, people primarily look to professional advisors and their inner circle of family and friends. The ongoing Logica Future of Money Study looks at these trust trends—who is placing their trust in professional financial advisors, who is looking to family and friends, and, also who is using AI for financial guidance. The latest wave of the study shows that professional advisors are most trusted for investing-related topics like when to buy and sell investments, while family and friends provide general help and advice on practical issues like how to create a budget. At the same time, advisors tend to be most trusted across a wide range of areas for help and advice. But how are people using AI to help them with money matters?
With the powerful emergence of artificial intelligence (AI), we see some people looking in the direction of AI as a supplementary source of financial guidance—particularly for simple tasks, straightforward news and general information. The rising utilization of AI-driven financial technologies (and of generative tools like ChatGPT) demonstrates an increased acceptance of incorporating artificial intelligence into daily life, and in turn into financial decision-making. The article, “Using AI Chatbots for Personal Finance Management,” talks about the appeal of the 24/7 support AI can provide and how people are using it for personalized financial advice based on individual data. They also, as shown in our study, are utilizing advanced AI tools for budgeting, debt management, and savings optimization. This trend builds upon the existing assistance that Americans rely on from financial advisors, as well as from their family and friends, but—so far—doesn’t come close to replacing these trusted and personal sources of advice.
For example, 67% of people rely on a professional advisor for “knowing how to manage my money during uncertain economic times,” whereas currently only 15% of people would turn to AI tools for this. Sixty-seven percent (67%) also would turn to a professional advisor for “how to make the most of my 401(k) or retirement account,” with only 14% turning to AI. However, for a simpler task like “knowing how to build my credit score,” we see more people (25%) trusting AI technology.
With future advancements in AI promising even greater efficiency and integration with financial services, we can certainly see the number of people relying on AI for financial advice and money management grow. World Finance reflects on whether AI can replace the personalized experience offered by human financial advisors, with industry experts suggesting that while AI enhances efficiency, human advisors remain essential for nuanced decision-making and personalized guidance. And there is a difference among generations in adoption of AI usage for financial matters.
In general, we see that Millennials are often the most likely to be early adopters of technology (even compared to Gen Z), and AI appears to be no exception. Our research reveals that Millennials in particular are leading the charge in adopting AI-based technologies for these simpler financial advice areas, driven by the emergence of new tools and an increasing awareness of existing ones. Thirty-two percent (32%) of Millennials will trust AI for help in creating a budget versus 26% of the overall population. Twenty-three percent (23%) will trust AI for “selecting investment options that align with my financial goals,” versus 16% overall.
For those not yet on board with AI for money matters, our study finds a large percentage are open to using it in the future. Today, almost half of Americans are open to using AI-based tools for financial advice, highlighting the significance of a multifaceted approach to robust money management. Some of the AI-based financial tools people are already using, according to Bankrate, include automated budgeting and expense monitoring, investment platforms driven by AI for intelligent investing, customized financial planning aligned with personal goals, strategies for managing debt, and enhancements in financial literacy.
And to keep up, financial institutions need to stay on top of the trends and put energy toward developing the products and services in this arena that make the most sense in light of consumer trust and demand. Nothing is going to take the place of the human touch, for now, but we expect AI to continue to build momentum as a tool in personal finance, starting with some of the basic personal finance functions and expanding from there to take on a more complex and sophisticated role as AI improves.