A poll by the Financial Conduct Authority has revealed that 56 per cent of young investors trust artificial intelligence tools when deciding where to invest.
The survey of 18 to 40-year-olds found that confidence in AI guidance now exceeds trust in traditional news channels. By comparison, 47 per cent of respondents trust financial information from television and radio, while 46 per cent trust newspapers.
Social media influencers proved the least trusted source among young adults, with only 29 per cent saying they rely on financial advice from online personalities.
Many young investors also expect to rely on artificial intelligence even more over the coming year as digital tools become more embedded in personal finance apps.
Misconceptions over regulation
However, the City watchdog uncovered widespread confusion regarding consumer protections in digital finance. Nearly half of the respondents mistakenly believed that financial information generated by AI tools is subject to official regulation.
Lucy Castledine, director of consumer investments at the FCA, urged investors to remain cautious when using automated tools for market research.
"AI can help you research companies, understand jargon or explore options before you make a decision. But you need to understand how you're protected and continue to use your own judgement," Castledine said.
Role of the City regulator
The Financial Conduct Authority serves as the conduct regulator for financial services firms and financial markets in the United Kingdom, operating independently of government to protect retail consumers and maintain market integrity in the City of London and across the country.
The rise of automated tools and generative chatbots has transformed how retail investors conduct research. While artificial intelligence can rapidly summarize complex financial jargon and company filings, regulators emphasize that automated models may produce inaccurate outputs, hallucinated figures, or unverified market guidance.
The regulator's consumer investments division routinely monitors how emerging technologies and financial promotions affect public decision-making, aiming to prevent consumer harm while supporting innovation in financial services.
As DIY investing platforms grow in popularity, the FCA continues to warn consumers that unregulated financial information carries no statutory protection if investment decisions result in financial losses.
