Consumers Trust Human Financial Professionals Over AI, Survey Shows – But AI Gains Ground in Wealth Management and Stock Performance

Despite the advancements in AI technology and its capabilities, a recent survey by the FINRA Investor Education Foundation revealed that consumers still trust human financial professionals more in certain financial situations. The survey, which polled over 1,000 adults in February 2024, found that only 5% of respondents would seek AI to help make a financial decision, compared to 63% who would turn to a financial professional and 56% who would seek advice from friends and family.

Gerri Walsh, president of the FINRA Investor Education Foundation, noted that while the adoption of AI for financial information was lower than expected, there were generational differences, with 10% of respondents aged 18 to 29 reporting using AI for financial information. The study also found that consumers trusted AI more in specific financial situations, such as investments and managing portfolios.

In an experiment included in the survey, participants were presented with hypothetical financial statements, with half told the information came from AI and the other half from a financial professional. The results showed that for statements on stocks and bonds, nearly equal percentages of respondents trusted information from AI and human advisors. However, when it came to portfolio allocations, more respondents trusted information from a financial professional.

Gabe Rissman, president and co-founder of YourStake, pointed out that the low level of trust in financial professionals’ answers highlighted the need for advisors to utilize AI and machine-learning technology to build better relationships with clients. By combining the speed and analytical ability of AI with the comprehensive knowledge of financial professionals, advisors can provide more tailored and high-quality advice to clients.

While AI technology has the potential to enhance the financial advisory process, there are still challenges, such as the lack of trust in AI due to its tendency to provide inaccurate responses. Financial advisors are cautious about relying on AI for making financial recommendations, preferring to use it for tasks like streamlining workflow functions and managing assets.

Jordan Hutchison, vice president of technology and operations at RFG Advisory, emphasized the importance of human advisors in providing personalized advice that takes into account clients’ unique situations and future goals. The survey results suggest that while consumers may trust AI for specific topics, they still value the human element in financial advice.

Overall, the survey findings indicate that there is an opportunity for advisors to enhance the explainability and customization of AI models to address trust issues. By leveraging AI technology alongside human expertise, advisors can deliver more insightful and timely advice to clients, ultimately improving the overall quality of financial services.