The proliferation of advanced AI chatbots, such as ChatGPT, is fundamentally reshaping how individual investors approach financial markets, democratizing access to analytical tools once exclusive to institutional players. This technological surge is directly fueling significant expansion in the robo-advisory sector, as a notable percentage of retail investors are now leveraging these conversational AI systems for stock selection and portfolio management.
Robo-Advisory Market Poised for Substantial Growth
The robo-advisory market, encompassing a broad spectrum of automated, algorithm-driven financial services from fintech startups to established banks and wealth managers, is poised for substantial growth. Projections indicate a remarkable ascent from approximately $61.75 billion in revenues last year to an estimated $470.91 billion by 2029, representing an almost sixfold increase. This trajectory underscores a burgeoning reliance on AI-driven solutions for financial guidance and execution.
AI Tools as a Substitute for Professional Terminals
For individuals like Jeremy Leung, a former company analyst with UBS, AI tools have become indispensable following a job transition. Without access to costly professional terminals like Bloomberg or specialized market data services, Leung finds that even basic chatbots can effectively replicate many of his previous analytical workflows. However, he highlights a critical limitation: these general AI models cannot access proprietary data behind paywalls, potentially leading to incomplete analysis.
Retail Investor Adoption of AI for Investments
Leung’s experience is indicative of a broader trend. A significant portion of retail investors, approximately half, express willingness to employ AI tools like ChatGPT or Google’s Gemini for investment decisions. More concretely, a survey by broker eToro, which canvassed 11,000 global retail investors, revealed that 13% are already actively using these AI tools. In the United Kingdom specifically, a survey by Finder indicated that 40% of respondents have utilized chatbots and AI for personal finance advice, underscoring the widespread adoption of these technologies for financial matters.
Caveats and Risks of Using General AI for Finance
Despite the enthusiasm, a crucial caveat accompanies the use of these advanced AI platforms. ChatGPT itself cautions that it is not a substitute for professional financial advice, and its developer, OpenAI, has not disclosed specific data on investment-related usage. Dan Moczulski, UK managing director at eToro, emphasizes the inherent risks, stating that the danger arises when users treat general AI models as infallible oracles. He advises prioritizing AI platforms specifically engineered for market analysis, as general models may present inaccuracies in figures and dates, adhere too rigidly to established narratives, and place undue emphasis on historical price movements for future predictions.
Michael Carter holds a BA in Economics from the University of Chicago and is a CFA charterholder. With over a decade of experience at top financial publications, he specializes in equity markets, mergers & acquisitions, and macroeconomic trends, delivering clear, data-driven insights that help readers navigate complex market movements.