There’s nothing new about younger generations being quicker than their older peers to adopt new technologies — whether it be the horseless carriage, cordless phone or artificial intelligence. So it should be no great surprise that Gen Zers are more than twice as likely as baby boomers to use AI for financial advice, according to a new Yahoo Finance/Ipsos survey.
The survey of 1,276 U.S. adults, released on Tuesday, found that 20% of Gen Z adults are “somewhat or very likely” to use an AI-powered financial advisor vs. only 9% of boomers and those who are older. Boomers also ranked well behind millennials (18%) and Gen Xers (17%) in this regard.
Regardless of age group, the majority of investors are still unlikely to use financial advisors powered by AI. Here’s a breakdown of the responses by generation when asked if they would user AI financial advisors. Some respondents apparently did not answer, which is why the percentages don’t add up to 100%:
The results suggest that while a small number of younger adults are embracing AI, that number is gradually growing, according to Yahoo Finance.
Younger adults also had “more nuanced feelings” towards AI across other survey questions. For example, none of the generations said they trust AI a “great deal” to advise them on finances. However, Gen Z was more likely than other generations to say they trust it “slightly.” At the same time, Gen Zers and millennials were also more likely to say that their top concern with AI was inaccurate information.
The survey was conducted amid a steep rise in financial companies developing generative AI chatbots to power consumer-facing services, Yahoo Finance reported. An example is JPMorgan Chase, which has applied to trademark an AI investment adviser product similar to ChatGPT that would advise customers on investments.
The rise of AI in the financial world has been greeted with a mix of enthusiasm and caution. As GOBankingRates recently reported, the technology can have a positive impact from a purely practical standpoint — especially for boomers. For example, using ChatGPT to create a budget, track expenses or make a savings plan can simplify things considerably.
“First, it can be faster than typing in many circumstances,” Don White, CEO and co-founder of Satisfi Labs, wrote in a column for Forbes. “Secondly, it is often more convenient to converse with a voice-based assistant than to type in an exact query. Lastly, voice interaction can make computer use much easier for users with vision problems.”
But when it comes to making investment and other important financial decisions, some experts remain skeptical. One of the concerns cited in an April blog on the Mission Wealth website is that AI lacks “empathy that is essential in financial and estate planning.”
“While AI can analyze data and provide objective advice based on algorithms, it lacks the ability to understand and respond to the emotions of its clients,” the blog noted. Also of concern is AI’s potential for bias in its algorithms. “While AI is designed to be objective and data-driven, the algorithms it uses are only as unbiased as the data they are based on. If the data sets used to train AI contain inherent biases, such as gender or racial biases, this could lead to biased advice being given to clients.”
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