Advisers believe more than a quarter of clients are using AI tools to support advice, according to Wealthtime.
The findings follow research from the Financial Conduct Authority which revealed that as many as four in five less experienced investors have used AI for help with investing.
Wealthtime’s research, which surveyed 175 advisers, found 63% of advisers report that clients are independently using AI tools in relation to their financial advice, including 27% who use it regularly and 36% who do so infrequently.
A further 31% suspect some clients may be doing so, while just 6% say 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 most common client use of AI was to prepare questions ahead of meetings (59%), followed by checking or validating advice already given (50%). A similar proportion (44%) use AI to research the firm before the first meeting.
Additionally, a third (35%) of advisers said some clients are generating their own recommendations independently,
However, the FCA’s research highlighted concerns about investors potentially misunderstanding the level of protection offered by AI when using it to support financial decision-making. Over two fifths (44%) wrongly believe AI-generated financial information is regulated and 32% mistakenly expect compensation from the Financial Services Compensation Scheme or Financial Ombudsman Service for poor AI advice.
Toby Larkman, managing director at Wealthtime, said: “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.”
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