A new study by the Financial Conduct Authority (FCA) reveals that four out of five less experienced young investors (aged 18-40) have used artificial intelligence for investing assistance. The research highlights that 56% of respondents trust AI tools, outpacing traditional media like television (47%), press (46%), and social media influencers (29%). Furthermore, two-thirds of surveyed investors expect to rely even more heavily on AI over the coming year to guide their investment decisions. However, the regulator expressed serious concerns over widespread misunderstandings regarding legal protections. Nearly half (44%) of respondents incorrectly believe that AI-generated financial guidance is regulated, while 38% think it is acceptable to make investment choices based entirely on AI output. Additionally, 32% mistakenly expect financial ombudsman compensation if AI advice causes losses, despite general-purpose AI models operating entirely outside regulatory frameworks. For market participants and regional investors in the Gulf and broader MENA region, the findings underscore the growing intersection of retail trading and automated tools. While AI can streamline financial research and technical queries, regulators stress that investors remain fully exposed to capital risk. Market participants are advised to maintain strict independent research protocols and avoid relying solely on unverified algorithm outputs.
