FCA warns AI investment advice may leave users unprotected

The UK’s Financial Conduct Authority warned that people using AI chatbots for investment help may not be protected if decisions go wrong. Four in five less experienced investors have used AI tools for help with investment decisions, while a survey of adults aged between 18 and 40-years-old who own investments or are considering buying them in the next year found that 56% trust AI tools.

Confidence in AI tools was higher than in several traditional information sources, with 47% saying they trust TV and radio, 46% trusting the press, and 29% trusting social media influencers. The FCA said AI-generated financial information is not regulated by the FCA, but 44% of respondents believe it is.

Some 38% said it is fine to make an investment decision based solely on AI-generated information, and nearly a third mistakenly think they would receive compensation from the Financial Services Compensation Scheme or Financial Ombudsman Service if AI advice went wrong. The FCA urged consumers to verify sources, remember that AI cannot predict investment performance, and use their own judgement when making financial decisions.