Is your financial advisor using AI for investment recommendations — and hiding it?

These days, everything is all about AI. Artificial intelligence, agentic workflows, chatbots and all the rest. But what if your financial advisor is using AI to manage your account, respond to emails and formulate investment ideas?

And didn't tell you?

How would you feel about that? Would you be glad your FA is using all of the latest available tools to handle their business — or suddenly distrustful? Worried about your privacy and whether AI hallucinations could be eroding your wealth?

Janus Henderson Investors surveyed 1,000 U.S. affluent and high-net-worth investors. Their concerns regarding advisors' use of AI included the potential for biased recommendations (75%), data privacy concerns (74%), a preference for traditional methods (73%), and a lack of trust in AI-driven recommendations (72%). 

Seems obvious, doesn't it? Clients are not comfortable with their financial advice being AI-derived. 

But what if your financial advisor is using AI and not telling you? Most (79%) said they would be upset if their advisor used AI without disclosing it. Clients would be particularly peeved if AI provided investment recommendations (33%) or automatically responded to their texts and emails (40%).

However, only one in three advisors has actually discussed their use of AI with their clients.

It's a fact, AI may share sensitive data with third-party models. Firms must obtain your prior consent before using your data in agentic tools.

There are many issues to resolve regarding financial advisors' use of AI, especially when it's done without your approval.

Avoid a money hazard, ask your financial advisor:

• What AI tools are being used in the financial planning process?
• Is personal financial data being shared with or stored by any third-party AI models?
• How do you review and verify data and conclusions generated by AI?
• Specifically, what are AI tools being used for? Administrative tasks? Client communication? Investment recommendations? Anything else?