They ask, \u201cShould I buy?\u201d \u2014 and ChatGPT answers. Across the world, retail investors are letting AI chatbots into their portfolios, despite regulators insisting these tools aren’t yet ready to replace professional advice.<\/p>\n
Regulation around AI-assisted investing is still evolving, but nearly one in five retail investors already use such tools to make or adjust portfolio decisions, according to a recent report by trading platform eToro. The report, based on a survey of 11,000 retail investors across 13 countries, did not specify which AI tools were used.<\/p>\n
According to experts, the key question is whether AI interfaces are employed as research aids to support decision-making or whether they are providing direct investment advice. The latter is a regulated activity in the EU under the Markets in Financial Instruments Directive (MiFID), and no publicly-available AI tool is currently authorised to do so, according to the European Securities and Markets Authority (ESMA).<\/p>\n
Nevertheless, many retail investors see ChatGPT-like tools as a way to save time on research and reduce the cost of professional fund management. In some cases, the results can be striking.<\/p>\n
In 2023, comparison website Finder launched an investment fund designed and almost entirely managed (99%) by ChatGPT. Two and a half years later, the 38-stock portfolio is up nearly 55% \u2014 outperforming the average of the UK\u2019s ten most popular funds by more than 18 percentage points.<\/p>\n
Despite this success, many signs suggest that complex, unpredictable financial market moves may rattle the otherwise good results of the likes of ChatGPT and Gemini, as they may not accurately predict outcomes, leading to financial losses.<\/p>\n
OpenAI didn’t respond to Euronews’ request for comment. In their absence, our journalists asked ChatGPT to reply.<\/p>\n
\u201cWhile OpenAI hasn\u2019t explicitly said \u2018Don\u2019t use ChatGPT for investing,\u2019 the signals indicate that this AI tool should be used as a support rather than a replacement for professional financial advice, as it can generate plausible-sounding but incorrect answers (so-called \u2018hallucinations\u2019),\u201d said the bot. <\/p>\n
According to current European regulations, firms may use AI tools to analyse a client\u2019s knowledge and experience, financial situation (including risk tolerance), and investment objectives (including sustainability preferences). This is in cases where companies are providing personalised investment recommendations or managing and rebalancing client portfolios, among other tasks.<\/p>\n
When using AI tools in the context of financial advice, ESMA also stresses that transparency, governance, auditability, and human oversight must be prioritised.<\/p>\n
AI’s role in the financial sector<\/p>\n
Artificial intelligence is increasingly reshaping finance, powering everything from customer service and fraud detection to portfolio management and personalised advice. <\/p>\n
Behind the scenes, thousands of sophisticated AI models crunch vast amounts of data \u2014 market trends, historical prices, and even news headlines \u2014 to forecast movements and spot investment opportunities.<\/p>\n
A 2025 study in Nature compared ChatGPT with other AI tools used in finance. It found that the chatbot’s ability to process unstructured data, such as financial reports and user queries, makes it particularly effective in tasks like financial planning and risk analysis. But the study also highlighted a major concern: if the data fed into these systems is biased or inaccurate, AI can produce misleading results \u2014 a phenomenon known as \u201challucination\u201d.<\/p>\n
Investment platform BridgeWise, which provides AI-powered research and analysis and investment recommendations on over 50,000 assets, offered a clear example of why tools like ChatGPT can be risky if not used correctly.<\/p>\n
\u201cIf you ask a question about a company that is not very well-known, this is where hallucination will come because the chat will try to please you [by providing an answer],\u201d warned Gaby Diamant, BridgeWise’s co-founder and CEO. He advised against general prompts such as \u201cShould I invest in X?\u201d, noting they can produce highly misleading results.<\/p>\n
BridgeWise emphasises that qualification and compliance with regulation are key. The company delivers AI-driven research and analysis over specific assets \u2014 including stocks, ETFs, and funds \u2014 and partners with stock exchanges in Switzerland, Israel, Japan, and Brazil.<\/p>\n
The firm uses an advanced algorithm designed to interpret market movements. \u201cWe offer a decision-support tool \u2014 we don\u2019t make decisions for our clients,\u201d said Diamant.<\/p>\n
When asked whether AI can entirely replace financial advisors, Diamant was clear: \u201cNever.\u201d He believes human judgment remains essential to understanding client needs and navigating the complexities of financial advice \u2014 something AI cannot yet replicate.<\/p>\n
Still, he sees AI as a powerful enabler: \u201cOur mission since founding BridgeWise in 2019 has been to make capital markets accessible to everyone.\u201d<\/p>\n
The future of AI in our finances<\/p>\n
It seems clear that the technology must develop further before ChatGPT can take on the role of guiding retail investors through the often turbulent landscape of financial markets.<\/p>\n