UK watchdog flags risks as people use AI chatbots for investing

In short: More everyday investors are using AI chatbots for financial guidance, and UK regulators are warning that the usual consumer protections may not apply.

What's going on

People are increasingly asking AI chatbots for help with personal finance, like how to manage debt, what to invest in, and how to build a long-term plan. The Financial Times notes research suggesting around one in five UK adults would be open to using AI to make financial decisions for them.

In the UK, the Financial Conduct Authority (FCA) has started to focus on the issue. This week it published the Mills Review, which lays out new risks that can come from using AI in retail financial services, meaning products aimed at regular people rather than big institutions.

A key problem is that the line between “guidance” and “advice” can get blurry. A web page that lists general investing ideas is usually treated differently from a regulated adviser who looks at your personal situation. A chatbot can feel like a person giving you tailored help, even if it is really more like a very confident search and summary tool (like a librarian that answers back).

Another concern is liability, meaning who is responsible if the information causes harm. The Mills Review says only 40 percent of surveyed people understood they may have no formal way to complain or seek compensation if a general-purpose AI gives bad financial “advice.”

What to watch

The FT argues regulators should avoid overly strict rules that could raise costs and push people toward lower-quality sources, like social media “finfluencers.” Watch for clearer disclaimers inside chatbots, and for tighter rules on paid or sponsored financial content as chatbots add advertising.

Source: Financial Times