33% of Canadians rely on AI to manage money—could this be a problem?

What AI technology offers when it comes to money management

More than half of respondents (52%) believed AI can help people make more informed financial decisions, while slightly fewer (51%) believed AI could help with making financial planning more accessible for everyone.

Of the 33% of Canadians who use AI to help manage their finances, the most common reasons for using AI included:

• 54% - Use AI to ask questions about topics of interest
• 45% - Learning more about personal finance topics
• 43% - Creating and/or updating household budgets
• 42% - Identifying new investment strategies
• 40% - Building savings
• 40% - Creating and/or updating their financial plans
• 37% - Use AI for data analysis

Respondents revealed they are considering the use of AI to learn more about related personal finance topics (30%), increase their savings (28%), find new investment strategies (27%), create and/or update their household budgets (27%) and financial strategies (25%) and for retirement planning (22%).

Beyond monetary concerns, over a third are leveraging AI to build business, travel, exercise and meal plans (36%) and manage their schedules (36%). There are also those who are incorporating it into their creative process, including developing written drafts (41%) and photo and/or video editing (39%).

However, 68% believe AI doesn’t understand how emotions can impact financial planning, which for better or worse, is an important factor in how we handle our money.

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Generational differences when it comes to using AI

When it comes to generational adoption and enthusiasm, it should be no surprise that Gen Z is the most likely to use AI to ask questions about topics of interest (79%), create written drafts (72%), build business, travel, exercise and/or meal plans (63%) and manage their finances and investments (55%).

Using AI-enabled tools can work in tandem with the sheer number of important life decisions and changes that cohort has faced recently. In the last six months, 24% of Gen Z attended university or college, 20% switched jobs, 15% needed to make a large purchase such as a car or home, while 13% started their own business.

However, 91% of Gen Z say concerns about their overall financial situation is the leading source of fiscal anxiety, followed by fear of unknown expenses (90%), housing costs (86%) and keeping up with monthly bills (82%). Sixty-one percent of this demographic also believe AI can help people make more informed financial decisions and 53% are confident AI tools can help them make real financial progress.

State of the art investing practices

For some, investing can be extremely intimidating, with all the market fluctuations and volatility. Add in the quantify of choice and the decision to invest can feel impenetrable to the average Canadian. However, the emergence of robo-advisors — and the reliance on algorithms and even AI — has provided an opportunity for some less-than-confidnet investors to get into the equity market is safer, more predictable manner.

Thankfully, the Canadian market has a plethora of robo-adivors to choose from and you can breathe a sigh of relief knowing that these investing tools also have a fiduciary-duty. This means the robo-advisor — and the underlying financial firm responsible for the robo-advisor — works in the client's best interest when it comes to investment decisions.

If you're looking to get started with a robo-advisor, here are a few popular options:

• Wealthsimple: One of the first robo-advisors in Canada and continues to maintain its place as a top choice among Canadian investors. Using the Wealthsimple robo-advisor your investment portfolio can build wealth consistently, over time. You choose between 8 to 10 exchange-traded funds (ETF) as your portfolio holdings, as well as your level or risk tolerance (conservative, balanced or growth). Sign up for Wealthsimple today and receive $25 when you open and add $500 or more into the account.

• Questwealth: Offered by Questrade, a Canadian online brokerage, the Questwealth Portfolios give clients professionally managed ETF portfolios at a fraction of the price. Fees are among the lowest in the country and cover everything from setting up your portfolio, periodic account rebalancing and dividend reinvestment. Sign up for Questwealth and experience the freedom to place you portfolios into different types of accounts, including TFSAs, RRSPs, RIFs, RESPs, cash and more.

— with files from David Saric, Leslie Kennedy and Nicholas Sokic