AI and Investment Advice: Are young people taking financial risks?

Artificial intelligence (AI) is rapidly changing the way we access information, and investing is no exception.

New research from our regulator, the Financial Conduct Authority (FCA) highlights just how significant a role AI is beginning to play in the investment journey, particularly among younger and less experienced investors – but do they understand the risks?

The research, conducted with 18 to 40 year olds who either already invest or are considering beginning their investment journey, found that 56% trust AI tools when it comes to investing.

However, the regulator warned these investors may be misunderstanding the level of protection if they rely on AI for their investment advice. 44% (of those surveyed) wrongly believe AI generated financial advice is regulated, while 38% believe it is ok to make financial (investment) decisions based solely on the outputs of AI. And worryingly, 32% (wrongly) believe they would receive compensation from the Financial Services Compensation Scheme (FSCS) or Financial Ombudsman Service (Fos) if AI advice was incorrect.

Lauren Lee, Head of Risk, comments:

“Of course, it is positive that financial education is becoming more accessible, whether through influencers or AI. We know that the State Pension alone is unlikely to provide the comfortable retirement many people hope for, so encouraging people to start saving early has never been more important.

“Saving for retirement can feel like a distant priority when you’re in your twenties, but financial choices made now can have consequences for years to come – including your ability to secure a mortgage or rental agreement.

“AI and ‘finfluencers’ have the potential to make financial education more accessible, but with that comes a real risk. Misinformation can sound convincing, and following poor advice could have long-term financial consequences. The key is to question what you see, check the facts and seek professional, personal advice from a qualified financial planner.”

Information is not the same as advice

Most of us are now using AI in some form and it is not something to be feared or avoided. It can be a valuable tool and may help more people engage with their finances, which is positive. However, investors should be aware that AI generated information can be inaccurate or lack the context needed to make an appropriate financial decision.

Jessica Wilkinson, Head of Advice comments “While we continue to embrace advancements in technology, including AI, to improve both our internal processes and client experience, the true value lies in the human element. Client-first advice, built around individual financial goals, combined with long-term relationships, peace of mind, reassurance – especially during uncertain times and trust, is what truly makes the difference”

Source: Conducted by the FCA via the platform Attest using a quantitative usage and attitudes (U&A) study. The survey was conducted on 24 July 2026 to understand consumer adoption, trust, comfort, and future expectations regarding the use of AI tools for personal investment research and financial decision-making in the UK market.