Artificial intelligence has crept into our daily lives in many ways, both apparent and imperceptible. Older generations are reluctant to operate this technology in the context of their finances.
According to Northwestern Mutual’s latest report, an average of 54% of respondents said they trusted people more to handle a variety of personal finance tasks, including creating a retirement or savings plan, providing advice and managing budgets. A study of planning and progress published on Tuesday. Meanwhile, just 15% said they trusted AI more for the same tasks.
However, the survey shows that younger generations are more open to financial advisors using this technology to manage their finances. Most Gen Z and Millennials said AI will improve the customer experience in the financial sector and are excited about the impact this technology will have on their financial lives.
For a generation
63% Gen Z stated that artificial intelligence will “improve the quality of customer service in the financial sector, including in the field of financial planning” and
57% Millennials said so too.
44% Generation X and
32% baby boomers (and older) shared this sentiment.
Similarly,
57% Gen Zers said they are excited about the impact AI and AI can have on their financial lives.
55% Millennials said the same.
38% Generation X agreed and
23% boomers said they were excited.
However, the survey found that, overall, people feel comfortable with their financial advisors using AI for a wide range of tasks.
“Younger generations are more likely to accept that their financial services partners are using GenAI to manage their money,” Christian Mitchell, executive vice president and chief client officer at Northwestern Mutual, said in a statement accompanying the report.
Mitchell noted that even among older generations, “most believe AI and GenAI can be a fantastic addition to the trusted advisor, helping financial professionals deliver even better results and experiences for clients.”
“The bottom line is this: AI can lend a hand organizations find human potential, not replace it,” he said, adding that he believes the future will be “human + digital.”
The Harris Poll, commissioned by Northwestern Mutual, surveyed 4,588 U.S. adults aged 18 and over from January 3 to January 17.
Trusting the human touch
Another study released Tuesday by the FINRA Investor Education Foundation similarly found that people do not fully trust artificial intelligence when it comes to providing information related to personal finances.
A nationally representative sample of over 1,000 consumers was provided with hypothetical financial information. Half of the participants were told that the information was provided by artificial intelligence, and the other half were told that it was provided by a financial specialist. These were the results.
🏡Home ownership
A greater percentage of respondents trusted home ownership information when they were told it was provided by a financial advisor and were more distrustful when it cited artificial intelligence as the source, the study found.
Notably, a greater percentage of Black consumers trusted homeowner information when it came from AI (71%) rather than from a financial professional (49%).
📈Investing
Roughly one-third of respondents trusted 2024 stock and bond statements, regardless of whether they were made by AI or a professional.
However, a greater share of men trusted investment information when they were told it came from artificial intelligence (37%) rather than a financial professional (27%). More white respondents also trusted information when the source cited artificial intelligence (34%) compared to a financial professional (30%).
People trusted financial professionals more than artificial intelligence when answering questions about whether women should own a higher percentage of stocks in their investment portfolios than men and whether newborn adults should prioritize building an emergency savings fund before paying off all their credit card debt.
“The report found that while more consumers indicated they trusted individual financial professionals over AI, in some cases some consumers preferred AI-generated information on topics such as home ownership and saving,” Gerri Walsh, president of FINRA Foundation. “This perception may change over time, so it will be crucial for the financial services industry to continue to better understand how consumers interact with AI to better equip them with the resources and knowledge to make sound financial decisions.”