Advisers believe more than a quarter (28%) of clients are using AI tools to support advice, new research from adviser platform Wealthtime shows.
The findings follow FCA research which revealed that four in five investors aged 18 to 40 have used AI for help with investing.
According to the survey of 175 advisers, 63% report that clients are independently using AI tools in relation to their financial advice, including 27% regularly and 36% infrequently.
A further 31% suspect some may be doing so, with just 6% saying they have no reason to think any clients are using AI for advice. On average, advisers estimate that 28% of their client base is using AI to some extent.
The research found that the most common client use of AI was to prepare questions ahead of meetings (59%), followed by checking or validating advice already given (50%) and researching the firm before the first meeting (44%).
However, a third (35%) said some clients are generating their own recommendations independently, with one respondent describing a high value prospective client who arrived at the first meeting with “a number of ideas about solutions before we started the initial conversation.” Just 2% reported having lost a client as a result of their using AI tools, with one adviser reporting that usage is “very rare and not currently a threat.”
The FCA's research highlighted concerns about consumers misunderstanding the level of protection offered by AI when used to support investment decisions. Over two fifths (44%) wrongly believe AI-generated financial information is regulated, 38% think they can base an investment decision on AI output alone and 32% mistakenly expect compensation from the Financial Services Compensation Scheme (FSCS) or Financial Ombudsman Service (FOS) for poor AI advice. Wealthtime’s survey echoes these issues, with one adviser describing a client who had used ChatGPT for the legal and financial aspects of a divorce, which “got it horribly wrong”.
Toby Larkman, managing director at Wealthtime, commented: “AI is clearly becoming part of the advice journey, but let's not confuse convenience with expertise. Clients are using AI to arrive at meetings better informed and with more questions, which can be a positive thing. The danger comes when people start treating AI as a regulated adviser. AI can be impressively persuasive, even when it's completely wrong. When it comes to life-changing financial decisions, there's no substitute for professional advice that's been tailored to deliver the best outcomes for the individual client.”
