‘I can ask AI to teach me like I am 5’: Why Gen Z is turning to artificial intelligence for financial and investment advice

The shift is subtle but significant, raising an important question: when it comes to money, how much should you trust a machine?

The bedtime story investor

For Mishra, the appeal of AI wasn’t just convenience; it was the freedom from judgment. “People around me have lots of money, and I used to feel shy about asking for help for my Rs 5,000 investment,” she admits.

Asking a friend felt fraught. Asking a parent meant navigating the emotional minefield of money talk. And a financial advisor? “I do not think I can afford one yet, a good one,” she says.

What AI offered her was a patient, always-available guide, one with no ego and no fee. She could ask the same question repeatedly, in different ways, and get clear answers each time. She could even ask for concepts like compounding to be explained in the simplest terms, and it would do so without hesitation.

If millions of users ask similar AI prompts, they can be funnelled into the same trades or themes, inflating crowding risk in speculative assets. (Source: Freepik)

Over time, she moved from understanding basic terminology to comparing options, evaluating mutual funds based on five-year returns, and eventually building what she describes as a “balanced” stock portfolio with AI’s guidance on diversification.

“I do trust AI to a point, but I do not trust it blindly. I have made investments using AI, but I do take time to think it through,” she added.

Quick, easy, and non-judgmental

Moni Shandilya, 26, a consultant at One Source, uses AI differently but is driven by the same underlying impulse. For Shandilya, it is primarily a tool for daily money habits, tracking spending, managing small savings, and splitting a budget for a trip with friends.

“It’s quick and easy. I can ask anytime without feeling judged. Sometimes it’s easier than asking people, especially for basic or ‘silly’ questions,” she says.

She recalls a time when she followed AI advice on splitting her savings while planning a group trip, setting aside a portion for a possible emergency. The logic made sense, and the risk felt low, so she went ahead with it.

But when it came to stocks, she was more cautious and chose to hold back. “I wasn’t fully confident and wanted human input, so I asked my father later,” she says.

The pattern is evident: AI for the everyday, humans for the high-stakes.

Avirup Nag, 28, is even more circumspect. He mainly uses AI to determine savings targets based on his salary and to plan travel budgets. When it comes to serious investing, he steps back entirely.

“I have never taken such help in terms of major financial guidance from AI. I would rather discuss with my family or friends before I invest,” he says the professional. “AI is not for business investments; it’s more for corporate employees who have to spend money wisely every month.”

What experts say

Financial professionals watching this shift are not dismissive of AI, but they are clear-eyed about its gaps.

Adhil Shetty, CEO of BankBazaar, sees genuine utility in AI for “everyday financial awareness like understanding credit scores, comparing products, or decoding financial jargon.” But, he notes that its reliability has limits that cannot be ignored.

Citing the BankBazaar Aspiration Index 2025-26, Shetty points out that only 24 per cent of Gen Z users reported that AI led to better money management, compared with 31 per cent among older cohorts. More starkly, 8 per cent of Gen Z users have already experienced direct financial loss from over-relying on AI tools. “That is not a small figure for a generation still building its financial foundation,” he says.

AI has also made young investors more opinionated and sometimes overconfident (Source: freepik)

Kshitij Thakkar, founder of MTrust Investments, identifies an even more subtle danger: false confidence built on incomplete understanding. “AI delivers crisp, convincing answers, often without conveying uncertainty, assumptions, or limitations. For a young investor, this can blur the line between information and advice,” Thakkar says.

He also flags what he calls herd amplification. If millions of users ask similar AI prompts, they can be funnelled into the same trades or themes, inflating crowding risk in speculative assets.

There is also the matter of accountability. Unlike Securities and Exchange Board of India-regulated advisors, AI tools bear no responsibility for outcomes. “For Gen Z, the key risk isn’t using AI; it’s outsourcing judgment to it,” Thakkar says.

Informed, but not yet effective

Experts note a revealing trend: knowing more about finances hasn’t necessarily led to better financial decisions.

Shetty says that Gen Z users are the most digitally savvy, yet they report the lowest financial attainment among all age groups. “Using these tools has not yet led to achieving financial goals,” he notes.

The gap between information and action, between understanding what a SIP is and actually sticking to one through a market dip, is still very much a human problem.

The gap between knowledge and action, understanding what a SIP is versus actually maintaining it through a market downturn, remains a fundamentally human challenge.

Thakkar sees the shift reshaping how younger clients interact with advisors. They arrive at consultations having already done their AI homework with model portfolios in hand, tax strategies mapped out, and questions sharper. “This shortens the education phase and shifts conversations toward validation, refinement, and risk calibration rather than basic guidance,” he observes.

In some ways, AI has made Gen Z better clients, not fewer clients.

But there is a flip side. AI has also made young investors more opinionated and sometimes overconfident, requiring advisors to spend more time correcting assumptions. “Gen Z isn’t replacing advisors with AI. They’re redefining the advisor’s role from teacher to strategic partner,” Thakkar says.

Trust problem

Bruce Keith, CEO and co-founder of investorAi, offers a broader perspective. He says people have long avoided financial advisors for two main reasons: cost and trust. And AI addresses both. However, he cautions against the notion that Gen Z is uniquely vulnerable to AI-driven misinformation.

“It is not Gen Z that is most at risk. It is older people who are taking the responses as correct,” he says.

His children, both Gen Zs, had access to AI through university and are, he believes, better equipped than most of their seniors “to use and critique its responses.”

Cost, however, remains a real barrier. For many young earners like Mishra, investing their first Rs 5,000 puts a quality financial advisor out of reach. Keith acknowledges this, noting that a hybrid model, where advisors leverage AI to offer a wider range of options, is ideal for many.

But for Gen Z, the expense will likely keep such services out of reach for a few more years.

A great tool, but not enough

Back in Mishra’s world, the bedtime stories have served her well as a foundation. She understands her portfolio better than she ever expected to at 25. But she is candid about what AI cannot provide.

“AI is not going to be affected if I lose all my money — it might give me wrong data, and it has nothing to lose,” she says. “On the other hand, a person with experience will understand the same. Not saying they will be perfect, but there is caution.”

She concludes with what feels more like a wish list for her future self than a critique of AI. “I think AI can be a great tool for people to start learning, but I would one day really like a financial advisor — a very good one.”

It is a sentiment Shetty endorses. “Use AI to get informed, but verify before you act on it.”

In the end, both AI and the young investor are still learning, just at very different speeds and with very different stakes.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Individual financial situations vary, and readers are advised to consult a qualified financial planner, advisor, or mental health professional before making financial decisions.