Boomers and Gen X Do Not Trust AI to Manage Their Money, Study Finds

By Rocio Fabbro, Quartz (TNS)

Artificial intelligence has crept into our everyday lives in many ways, both seen and unseen. And older generations are hesitant to leverage the technology when it comes to their finances.

On average, 54% of respondents said they trust humans more to carry out a variety of personal finance tasks, including creating a retirement or savings plan, giving advice, and managing budgets, according to Northwestern Mutual’s latest Planning & Progress Study published June 4. Meanwhile, just 15% said they trust AI more for those same tasks.

But younger generations tend to be more open to their financial advisors using the technology to manage their finances, the survey found. A majority of Gen Z and millennials said AI will improve the customer experience in the financial sector, and are excited about the impact of the technology on their financial lives.

By the generation

63% of Gen Z said AI will “improve the customer experience in the financial sector, including with financial planning,” and

57% of millennials said so, too.

44% of Gen X, and

32% of baby boomers (and older) shared the sentiment.

Similarly,

57% of Gen Z said they’re excited about the impact AI and generative AI could have on their financial lives.

55% of millennials said the same.

38% of Gen X agreed, and

23% of boomers said they’re excited.

Overall, however, people feel comfortable with their financial advisors using AI for a wide range of tasks, the survey found.

“Younger generations are more willing to accept having their financial services partners leverage GenAI to manage their money,” Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual, said in a statement accompanying the report.

Mitchell noted that even among older generations, a “majority believe AI and GenAI can be a fantastic addition for a trusted advisor, helping financial professionals deliver even better results and experiences for their clients.”

“The bottom line is this: artificial intelligence can help organizations find human capacity, not replace it,” he said, adding that he believes the future will be “human + digital.”

The Harris Poll surveyed 4,588 U.S. adults aged 18 or older on behalf of Northwestern Mutual between Jan. 3 and Jan. 17.

Trusting the human touch

Another study published by FINRA Investor Education Foundation on Tuesday similarly found that people don’t fully trust AI when it comes to providing information related to personal finance.

A nationally representative sample of more than 1,000 consumers were given hypothetical financial information. Half of the participants were told the information was provided by artificial intelligence, and the other half were told the information was provided by a financial professional. These were the results.

🏡 Homeownership

A larger share of respondents trusted information on homeownership when they were told a financial professional had provided it, and more distrusted it when AI was cited as the source, the survey found.

Notably, a bigger proportion of Black consumers trusted the homeownership information when it came from AI (71%) rather than from a financial professional (49%).

📈 Investing

Roughly one-third of respondents trusted a statement on stock and bond performance in 2024, regardless of whether it was provided by AI or a professional.

However, a larger slice of men trusted the investing information when they were told it came from AI (37%) as opposed to from a financial professional (27%). More white respondents also trusted the information when AI was cited as the source (34%) compared to a financial professional (30%).

People trusted financial professionals more than AI to answer questions about whether women should hold a higher percentage of stocks in their investment portfolios compared to men, and if young adults should prioritize building an emergency savings fund before paying off all their credit card debt.

“This report found that while more consumers indicated trusting individual financial professionals than AI, there are instances where some consumers preferred AI-generated information related to topics like homeownership and saving,” said Gerri Walsh, president of the FINRA Foundation, in a statement. “These perceptions could change with time, so it will be crucial for the financial services industry to continue to better understand how consumers interact with AI to better equip them with the resources and knowledge to make sound financial decisions.”

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