Retail investors are increasingly turning to AI chatbots like ChatGPT for portfolio management, despite regulatory concerns about their readiness to replace professional financial advice. A recent eToro report reveals that nearly 20% of retail investors use AI tools for investment decisions. However, experts warn that these tools should serve only as research aids, as providing direct investment advice is regulated in the EU under MiFID, with no AI currently authorized for this role. Promisingly, AI-driven funds, such as Finder’s ChatGPT-managed fund, have outperformed traditional options, yet potential pitfalls exist. Misleading outputs, known as “hallucinations,” can arise from biased data. Experts emphasize the importance of human oversight, arguing that human judgment is essential in navigating complexities in financial advice. The robo-advisory market is poised for significant growth, projected to reach $471 billion by 2029, yet the technology requires further development for reliable financial guidance. Always conduct individual research before making investment decisions.
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