Overview
- The Financial Conduct Authority published research on 26 August showing four in five less-experienced investors have used AI tools and that 44% wrongly believe AI financial output is regulated by the FCA.
- The FCA said general-purpose chatbots such as OpenAI’s ChatGPT and Google Gemini are not covered by its rules while bespoke digital services designed to give regulated advice are more likely to fall under supervision.
- The research found 38% of respondents would be comfortable making investment decisions based solely on AI output and nearly a third wrongly expect compensation from the Financial Services Compensation Scheme or the Financial Ombudsman Service if AI advice fails.
- The regulator advised people to use AI only for research, to check the sources behind AI answers, and to keep exercising their own judgement and long-term thinking when making investment choices.
- Industry leaders urged wealth managers to redesign advice offerings so they are faster and more accountable than chatbots, a shift that could reshape how retail advice is delivered or leave inexperienced investors exposed if firms do not adapt.