Investors are increasingly turning to chatbots for AI financial advice, but the habit appears to be making human advisors more valuable rather than less, according to new research from Vanguard.
Vanguard researchers found that about one in three of the firm's investors has used AI for help with personal finance, investing or retirement planning. Still, those same investors were also roughly 11 times as likely to say AI had increased the value they place on human advice as to say it had reduced it (32% versus 2.9%). Among Vanguard's advised clients, 41% said they value their advisor more because of AI, and 2% said they value their advisor less.
The research arrives as two of the largest U.S. retail brokerages push AI deeper into the investing process. Robinhood Markets used its HOOD Summit in Houston on Tuesday evening to announce AI-powered automated trading tools, crypto perpetuals and expanded trading hours aimed at active traders.
The day after, Charles Schwab introduced Charley, a generative AI assistant that will begin rolling out to eligible U.S. retail clients in October.
Vanguard's Investment Strategy Group surveyed 6,686 of the firm's personal investors in June. It found younger investors were far more likely to use AI: Some 43% of Gen Z and millennial investors and 41% of Gen X investors said they have used AI for financial guidance, compared with 15% of baby boomers and older investors.
Most of that use is exploratory. Roughly half or more of AI users said they rely on the technology to get started on a topic, learn financial concepts or test an idea. Only a few let AI make decisions for them; even among younger investors, only 4% said they use AI to make decisions on their behalf. Investors were about three times as likely to use AI to prepare for or review a meeting with a financial professional as to replace one.
Respondents most often cited three reasons for using AI: it costs nothing, it satisfies curiosity about the technology, and it is available at any hour.
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Using AI has not made investors trust it. Among Gen Z, millennial and Gen X investors, 63% reported little or no trust in guidance from conversational AI, and only 5% to 6% reported high trust. Among baby boomers and older investors, 78% expressed low or no trust and 2% high trust. By contrast, a majority of every generation, between 54% and 63%, said they highly trust guidance from a human advisor or planner.
Accuracy is a large part of the problem. Of investors who have used AI, 37% said they received incorrect or misleading information and 44% said they couldn't tell. Just 19% were confident the information they received was sound.
The two brokerage announcements show how differently firms are approaching the question of how much authority to give AI.
Robinhood's tools are built for active traders who want automation. The company said more than 150,000 customers have opened agentic trading accounts since the initial rollout. The AI agents operate only within those dedicated accounts, which have adjustable safety settings, including a default requirement that the customer approve each trade manually.
Schwab is taking a more service-oriented route, as it says Charley will be able to answer clients' audio or typed-in questions about balances, positions, transfers and tax documents. It will also complete select tasks, such as adding beneficiaries, updating watchlists and enrolling eligible securities in dividend reinvestment. For more demanding situations, clients can also be handed off to a Schwab representative.
In a late-September survey of more than 500 clients and prospects, Schwab found 65% said AI can either help execute routine tasks or play a meaningful role in investing when paired with human expertise.
"Our clients want the ease of AI combined with the expertise, trust and relationships that are uniquely Schwab," said Amy Ruegg, head of digital retail at Charles Schwab. "Charley is an important step in bringing those together."
Vanguard's data suggest investors lean toward a model like Schwab's, at least for now. In Vanguard's polling, between 80% and 85% of respondents in each age group said they are uncomfortable with AI taking action on their behalf.
Still, researchers also warned that AI already competes with advisors on one front: about four in 10 AI users said chatbots beat human advisors at avoiding conflicts of interest and giving unbiased guidance.
"AI competes with humans on perceived objectivity, but humans have the edge on trust, empathy, and holistic support," Vanguard said.
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