{"slug": "use-ai-for-investing-at-your-own-risk-warns-watchdog", "title": "Use AI for investing at your own risk, warns watchdog", "summary": "The Financial Conduct Authority (FCA) has warned that Britons using AI for investment advice may lack protection if things go wrong, as research shows four in five inexperienced investors use AI tools for investment decisions. The FCA does not regulate AI-generated financial information, yet 44% of Brits believed it did, and nearly a third thought they could receive compensation if AI advice failed. Lucy Castledine, director of consumer investments at the FCA, said: \"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.", "body_md": "[If you click links to other sites on this page, we will earn a commission](https://www.cityam.com/about-city-ams-betting-and-affiliate-section/).# Use AI for investing at your own risk, warns watchdog\n\nThe financial watchdog has warned Brits using AI for investment advice that they may not be protected if things go wrong as more people turn to online chatbots.\n\nFour in five inexperienced investors admitted to using AI tools for help with their investment decision, according to the latest research from the Financial Conduct Authority (FCA).\n\nThe findings come as people increasingly turn to online chatbots for help, as traditional financial advice remains out of reach for many.\n\nYoung people in particular are shunning advisers for chatbots. Over 50 per cent of 18 to 40 year olds said they trust AI tools to make decisions for them.\n\n## No safety net\n\nBut the FCA has warned that people may be underestimating the risks that come with taking on unregulated advice from chatbots.\n\nThe watchdog does not regulate AI-generated financial information, but 44 per cent of Brits believed they did.\n\nMeanwhile, nearly a third thought that they could receive compensation from the Financial Services Compensation Scheme or the financial ombudsman if AI advice went wrong.\n\nBut as AI falls out of the regulator’s scope it does not protect customers from potential harm caused by the technology.\n\nThis includes popular chatbots such as ChatGPT and Google Gemini.\n\nLucy Castledine, director of consumer investments at the FCA, said: “AI can help you research companies, understand jargon or explore options before you make a decision.\n\n“But you need to understand how you’re protected and continue to use your own judgement.”\n\n## Tackling the problem\n\nFinancial advisers are also warning consumers of the risk of using AI, arguing it can not [replicate](https://www.cityam.com/fca-bans-wealth-manager-trio-behind-35-5m-investor-visa-scam/) the tailored advice given by a professional.\n\n“AI is rapidly becoming the first port of call for a new generation of retail investors, but confidence is clearly running ahead of understanding,” Rob Hillock, head of personal financial planning at Broadstone, said:\n\n“It cannot necessarily replicate the personalised assessment needed to determine whether an investment is suitable for an individual’s objectives, time horizon, appetite for risk and capacity for loss.”\n\nBut Graeme Devlin, head of risk, regulation and compliance at Capco, urged wealth managers not to “treat this simply as an education problem” but instead look at what they must do to pull inventors over\n\nDevlin said: “AI has changed what people expect. A chatbot can give someone an answer in seconds, so wealth managers cannot expect them to accept a slow and complicated route into advice.”\n\n“The proposition then has to offer more than another answer. It needs to [understand](https://www.cityam.com/why-investors-shouldnt-rush-to-buy-the-next-blockbuster-ipo/) the client’s wider financial position, goals, and appetite for risk, and turn that into suitable advice with ongoing accountability.\n\n“The adviser’s role is not to repeat information a client can already find, it is to ask better questions, challenge assumptions, spot what the technology has missed and help the client make a decision they can live with.”", "url": "https://wpnews.pro/news/use-ai-for-investing-at-your-own-risk-warns-watchdog", "canonical_source": "https://www.cityam.com/use-ai-for-investing-at-your-own-risk-warns-watchdog/", "published_at": "2026-08-26 23:01:00+00:00", "updated_at": "2026-08-26 23:18:09.414608+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-policy", "ai-ethics", "ai-products"], "entities": ["Financial Conduct Authority", "Lucy Castledine", "ChatGPT", "Google Gemini", "Broadstone", "Rob Hillock", "Capco", "Graeme Devlin"], "alternates": {"html": "https://wpnews.pro/news/use-ai-for-investing-at-your-own-risk-warns-watchdog", "markdown": "https://wpnews.pro/news/use-ai-for-investing-at-your-own-risk-warns-watchdog.md", "text": "https://wpnews.pro/news/use-ai-for-investing-at-your-own-risk-warns-watchdog.txt", "jsonld": "https://wpnews.pro/news/use-ai-for-investing-at-your-own-risk-warns-watchdog.jsonld"}}