Survey: Nearly Half of Americans Think AI Can Give Better Investing Advice Than Human Stock Brokers
Updated October 28, 2024 at 10:23 am
Since ChatGPT was released to the public in November 2022, AI has taken the tech world by storm. But what about the world of investing? AI in investing refers to the use of artificial intelligence, machine learning and large language models (LLMs) for financial purposes. This includes everything from asking chatbots for investment advice and using robo-advisors for wealth management to algorithmic trading and predictive analytics.
To find out how people are (or aren’t) using AI to help with their finances, we asked over 1,000 Americans whether they’ve used AI to invest, how they think it compares to human stock brokers and what would make them less skeptical of the technology.
Key Takeaways - Almost 50% of Americans have used AI to help them invest or manage their money.
- 1 in 4 Americans say they’d be very comfortable letting AI make investment decisions for them.
- Only 18% of Americans believe human stock brokers can give better financial advice than AI.
Vault’s Viewpoint on AI in Investing
- While AI is a divisive technology, around 1 in 2 Americans have already used it to help them invest.
- Some people say they’d be willing to use AI to invest if it had a proven track record, if it became more advanced, or if there was more transparency about how it makes financial recommendations.
- A significant number of Americans believe that AI can already outperform human stock brokers.
Nearly 50% of Americans Have Used AI To Help Them With Investing
From AI-powered virtual assistants to AI-driven navigation apps, artificial intelligence has quickly become a transformative technology that enhances our daily lives. People have even started using AI to help them with their finances. In fact, almost 50% of Americans say they’ve used AI to help them invest or manage their money.
This shows that even if people are concerned about the consequences of AI, many already trust it to assist them with important, sensitive tasks like wealth management. And as AI tech becomes more pervasive, this number will likely grow.
38% of Americans Are Most Comfortable Using AI for Market Research and Analysis
Among Americans who are comfortable with AI in investing, 38% say they’d be most likely to use it to analyze large datasets, identify trends and generate research reports. This was the most popular use case, with fewer respondents stating they’d use AI for personalized investment advice (25%), real-time trading (20%) or portfolio rebalancing and risk management (17%).
This shows that many Americans want to use AI to assist with their own investment research and due diligence rather than taking a hands-off approach.
1 in 4 Americans Say They’d Feel Very Comfortable Letting AI Make Investment Decisions for Them
AI technology has developed rapidly in recent years, and it’s earned the trust of a significant portion of the public. Our findings reveal that 1 in 4 Americans feel very comfortable letting AI make investment decisions on their behalf, while an additional 15% said they’d feel somewhat comfortable.
These stats reveal that Americans open to AI investing are not only willing to ask AI for financial advice but also trust it with decision-making. This squares with our related finding that 40% of people say they trust robo-advisors that use algorithms to invest money with minimal human oversight.
All in all, this leaves a fairly even split between Americans who are comfortable letting AI invest on their behalf (41%) and Americans who aren’t (44%), with the remainder (15%) being neutral.
37% of Americans Say They Wouldn’t Use AI To Invest Under Any Circumstances
Despite the fact that so many Americans have turned to AI for investing help, a sizable minority remain deeply skeptical of the technology. Our survey found that 37% of people would not use AI to invest under any circumstances, no matter how advanced or effective it becomes.
On the other hand, 30% of the people who have yet to invest with AI say they would if it had a proven track record of outperforming traditional investment platforms. Another 18% say they’d be willing to try it out once there’s more transparency about how AI makes investment recommendations and decisions.
Less Than 1 in 5 Americans Think Human Brokers Can Give Better Investment Advice Than AI
Our survey also found that the public has a high estimation of AI capabilities—so high, in fact, that only 18% of respondents believe human stock brokers can give better investment advice than AI. Another 35% said they were unsure, but among Americans with opinions, over 2.5x more (47%) said yes than no.
Even respondents who haven’t used AI to invest were only 10% less likely to think AI can outperform stock brokers. With so many Americans convinced that AI can compete with humans, it becomes less surprising that nearly half have turned to it for investment assistance.
Of course, AI bots can’t do everything a stock broker does (nor do they claim to). However, the fact remains that, on average, people are confident that they have the potential to surpass human ability.
Lack of Knowledge About AI Is the Biggest Reason People Don’t Use It To Invest
When asked why they haven’t used AI to invest, nearly one-third of our respondents said it’s because they don’t know enough about how it works. This suggests that even more Americans will use AI to invest as educational resources grow.
Another 30% said they don’t trust AI to make financial decisions or suggestions, and 22% stated they don’t believe the technology is advanced or stable enough to aid in investing.
So, while a number of Americans expressed a total lack of confidence in AI, others would be willing to give it a chance once improvements are made through software updates or the release of more sophisticated AI products. And with the AI market expected to grow 36.6% every year until 2030, they may not be waiting long.
How To Use AI To Invest in 2024
Whether you’re part of the 47% of people who use AI to invest or the 53% who don’t trust it yet, here are some tips for all things related to AI and investing:
- Consider a robo-advisor: Robo-advisors are automated investment platforms that use algorithms to manage your money. Check out our choices for the best robo-advisors.
- Diversify your portfolio: If you primarily invest in one type of company, you may want to ask AI to help you research other high-value stocks and ETFs.
- Do your own research: While AI can help you analyze company fundamentals, it’s important to fact-check by doing your own due diligence using up-to-date data.
- Monitor AI trends: Try to keep your finger on the pulse of AI news, especially when heavy-hitting companies like NVIDIA or Google announce AI updates or new products. Set up Google alerts or track AI topics in your favorite news app.
- Leverage AI for data analysis: You can feed structured datasets like historical performance data into AI software to find patterns and get predictions. While this alone shouldn’t be considered prescriptive financial advice, it can help inform your investment plans.
- Set financial goals: AI assistants can help you set and track investment goals based on your current earnings and portfolio.
- Consult a financial advisor: AI may be a helpful investment tool, but financial advisors bring years of wealth management experience to the table.
Frequently Asked Questions on AI Investing
How Is AI Used in the Stock Market?
Stock traders use AI-powered algorithms to help them with a wide variety of use cases, including interpreting data trends, monitoring price changes, forecasting markets, analyzing risk factors and automating trades.
What Is the Best AI Stock to Invest In?
While many options exist in today’s market, some AI stocks are stronger investment picks than others, especially Nvidia, Microsoft, Amazon and Google. As always, research and compare company fundamentals before settling on a choice.
Can You Use AI for Investing?
You can use popular AI chatbots like Gemini and ChatGPT to ask for general investment advice or information about specific companies and markets. AI-powered robo-advisors can actually handle investment services for you, but you’ll have to pay for it.
Methodology
The survey of 1,048 U.S. adults aged 18+ was conducted via SurveyMonkey Audience for Newsweek on September 27, 2024. Data is unweighted, and the margin of error is approximately +/-3% for the overall sample, with a 95% confidence level.
Editorial Disclosure: We may receive a commission from affiliate partner links included on our site. However, this does not impact our staffs’ opinions or assessments.
