More everyday investors are turning to artificial intelligence tools like ChatGPT to help them manage money. But experts warn that AI is not ready to replace human financial advisers, and using it without caution can be risky.
A survey by eToro found that nearly one in five retail investors already use AI models for investment decisions. Many say AI helps them understand markets, analyse company earnings, and simplify financial reports.
However, European regulators stress that AI chatbots are not legally allowed to offer personalised investment advice. Under EU financial rules, only certified advisers can recommend specific investments.
Why the Caution?
AI tools are powerful, but they make mistakes. Sometimes they “hallucinate,” meaning they confidently produce incorrect answers. In finance, a wrong suggestion can lead to real financial losses.
Experts say AI works best with well-known stocks and widely available data. But when information is limited — such as with small companies or new cryptocurrencies — AI can struggle and provide misleading guidance.
Helpful Assistant, Not a Replacement
Financial specialists believe AI can still be useful. It can analyse large amounts of information quickly, track trends, and help beginners learn about investing. But users should not rely on it alone.
Regulators say any AI system used in finance must be transparent, supervised by humans, and easy to audit. This ensures safety for consumers and accountability for companies offering AI tools.
