Wealthtime Research Reveals 28% of Clients Now Use AI Tools to Support Financial Advice

New data from Wealthtime reveals that financial advice is no longer a closed conversation between professional and client, as over a quarter of investors now integrate AI tools into their decision-making process. For fintech professionals, this shift signals a critical transition where consumer-grade AI is actively challenging traditional advisory boundaries and regulatory assumptions.

What was announced

Research conducted by the lang cat in August among 175 financial advisers indicates that 63% of professionals have clients who are independently using AI tools to support their financial journey. The data shows that 27% of advisers see this behavior regularly, while 36% observe it infrequently. On average, advisers estimate that 28% of their entire client base is now utilizing AI in some capacity.

The study identified specific ways clients are leveraging these tools. The most frequent application is preparing questions ahead of formal meetings (59%), followed by using AI to check or validate advice already received from a professional (50%). Furthermore, 44% of clients use AI to research an advisory firm before their initial engagement. Perhaps most significantly, 35% of advisers reported that clients are generating their own investment recommendations independently.

This trend aligns with recent FCA research, which found that 80% of investors aged 18 to 40 have used AI for investment assistance. However, the Wealthtime study highlights a significant disconnect regarding consumer protection. FCA data suggests 44% of investors wrongly believe AI-generated financial information is regulated, and 32% mistakenly expect compensation from the Financial Services Compensation Scheme (FSCS) or Financial Ombudsman Service (FOS) if AI-driven advice leads to losses. Despite these risks, only 2% of advisers reported losing a client due to AI usage.

"AI is clearly becoming part of the advice journey, but let's not confuse convenience with expertise. Clients are using AI to arrive at meetings better informed and with more questions, which can be a positive thing. The danger comes when people start treating AI as a regulated adviser. AI can be impressively persuasive, even when it's completely wrong. When it comes to life-changing financial decisions, there's no substitute for professional advice that's been tailored to deliver the best outcomes for the individual client."

Toby Larkman, MD at Wealthtime.

The companies involved

Wealthtime is an established adviser platform business providing technology and administration services to the UK wealth management sector. The firm focuses on supporting financial advisers in delivering efficient service to their clients through integrated digital tools and investment wrappers.

The research also references the Financial Conduct Authority (FCA), the UK’s primary conduct regulator for financial services firms and financial markets. The FCA’s role includes ensuring that markets function well and protecting consumers from harm. Related to this regulatory framework are the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS). The FSCS acts as the UK's statutory deposit insurance and financial services compensation scheme, while the FOS is the official body established by Parliament to resolve disputes between consumers and financial organizations.

The AI tools mentioned in the research, such as ChatGPT, represent a new category of generative technology. Developed by OpenAI, ChatGPT has rapidly become a primary interface for consumers seeking automated information across various sectors, including legal and financial services, despite not being a regulated financial entity.

What FF News has reported before

FF News has tracked the increasing integration of generative AI across the financial services landscape. We recently covered how Insurify upgraded its ChatGPT plugin to facilitate real-time insurance quotes, demonstrating the move toward in-chat shopping. Similarly, we reported on Airtasker launching task booking via ChatGPT, further embedding AI into daily consumer transactions. In the institutional space, we noted that KTX launched an AI skills kit designed to bridge the gap between market intelligence and trade execution, highlighting that AI adoption is occurring simultaneously at both the retail and professional levels.

What this means

The industry is facing a "shadow advice" crisis. While advisers largely view AI as a tool for client preparation, the high percentage of investors who believe AI output is regulated suggests a massive liability gap. Traditional firms are under pressure to redefine their value proposition; if a client uses AI to validate a professional's advice, the adviser's role shifts from "source of truth" to "verifier of automated data." The real danger for the sector lies in the misunderstanding of the FSCS and FOS safety nets. As consumers increasingly rely on unregulated large language models for complex financial planning, the industry must brace for the fallout when these "persuasive" tools inevitably provide incorrect guidance on high-stakes decisions.