According to the latest annual Investor Index study, a new wave of reliance on Artificial Intelligence (AI) for financial advice is taking shape in the UK. The survey indicates that 73% of UK investors trust AI chatbot, ChatGPT, to provide reliable financial advice in the future.
ChatGPT Reshapes Investment Strategies
ChatGPT is a global phenomenon with 100 million users and a monthly website visit of over 1.8 billion. Now it seems to be gaining the trust of not just younger investors, but also those aged 65+. While 42% of younger traders have already sought advice from ChatGPT, over half of the older demographic also believe in the potential of ChatGPT as a future financial advisor.
According to Sarah Nunneley, the Senior Strategist at AML Group, ChatGPT's perceived future role in offering advice across all age groups is ‘remarkable’. The older generation's interest in AI was also evidenced by data published by eToro, a social trading platform, in April.
“This is most significant among younger investors – but you would be amiss to dismiss this group as ‘just kids’, this can be people in their late 30s and 40s, with money to invest and confidence in their choices,” Nunneley commented on the study. “The ‘new’ generation of investor is already here and they are looking at what is on offer, weighing up their options and it seems Robo-advice and AI are coming up on top.”
According to a recent analysis by Finance Magnates Intelligence, AI has the potential to change the FX/CFD industry. The only question is when it will happen.
The Rise of the Self-Reliant Investor
Additionally, self-reliance in financial matters has significantly risen, with 54% of UK investors depending more on their own research. It is an increase of 11% compared to last year. The cost of living crisis seems to have taught investors to navigate investment independently, with 79% of younger investors adopting a largely autonomous approach.
“In this, our 4th annual study, we’re seeing the cumulative effect of relentless bad news – pandemic, war, cost of living – in increasing investors’ belief in their ability to make investment decisions – be they prioritizing away from ethical for now or simply minimizing risk, adding high-interest savings accounts or keeping their portfolios the same,” Christian Barnes, the Head of Strategy at AML, explained.
Barnes also stated that self-reliance on financial markets is currently the ‘new selfishness’.
However, the conclusions drawn from the Investor Index study oppose a separate survey conducted by Cyprus' financial markets regulator, CySEC . The institution found that one in three retail investors already relies on the opinion of financial influencers, the so-called ‘finfluencers’. The highest percentage was recorded in France (42%), while the lowest was in Germany (24%).
Economy Shifts Trading Priorities
Interestingly, the focus on investments' ethical, environmental, and social impact has dwindled compared to last year. Now, only about a third of UK investors see ESG investments as crucial, marking a drop of 6% from 2022. In terms of demographic distribution, those aged 65 and over are least focused on ethical investing.
“The shift we’re seeing away from ESG priorities can be interpreted in several ways and will be an important trend to watch in the coming years,” Pauline McGowan, the Head of Strategy at The Nursery, commented.
During qualitative sessions, younger investors expressed their desire for investments that contribute positively to the world. They showed a strong interest in supporting new green initiatives and future-oriented technological solutions like AI and robotics.
The impact of AI on investment advice, the cost of living crisis, and shifting investment priorities are significant trends in UK investors' behavior. AI's role, particularly ChatGPT, seems set to redefine the future of investment strategies.
The Index, a comprehensive survey of investor behavior, is a joint effort by AML Group, a London-based communications agency, and The Nursery, a team of research and planning experts.
