What AI means for investors, advice, and policy

Substitute artificial intelligence for information technology, and his question is as relevant as ever.  

With each new technology, we must ask the same fundamental question: Does this benefit investors? For public AI tools and advice-seeking investors, there is still plenty of work to get the answer to yes.  

The clearest case is in advice. Today, only one in five Americans has access to a fee-based investment advisor. The wealthiest Americans have plenty of options, but for most others, financial advice has effectively become an unaffordable luxury.  

So it’s not all that surprising that without low-cost alternatives, many are turning to public AI tools. As noted in Vanguard’s newly published research The AI Advice Frontier: Use, Trust, and the Human edge, roughly one in three investors already uses AI for personal finance. For younger investors, that number is nearly four in 10.  

This is despite the fact that many risks of using GenAI tools are well-documented—whether they are sycophantic tendencies, potential biases, or the chance that AI will provide inaccurate information.¹ Based on a recent survey of Vanguard investors who have used AI, 37% of the survey respondents said it has given them incorrect or misleading information, and an additional 44% said they are unsure about the quality of the information.²

Meanwhile, plenty of the risks of AI-generated financial advice are less understood, from the lack of conflict-of-interest disclosures to opaque commercial incentives. For instance, in the same survey, 37% of older investors did not know, or were unsure about, the fact that AI tools have not been subject to the fiduciary obligation to operate in clients’ best interests.  

And while investors are using AI to educate themselves and pressure-test ideas, they want to remain in control. Eight out of 10 investors surveyed said they are not comfortable with AI acting independently in their finances, and roughly one in three said they want guardrails on what AI can do.

To be clear, we believe that expanding access to quality advice is paramount; AI-powered tools will be part of how advisors scale their capabilities while delivering better quality and lowering costs, and of how we’re improving the experience for self-directed clients who use our Digital Advisor. It’s why we’ve continued to invest in partnerships with leading AI companies—and why, last month, we announced our intention to acquire Altruist. 

At the same time, this evolving landscape requires that firms, advisors, and policymakers evolve in turn. Vanguard laid out its stance in a September 2026 policy memo, Closing the Gap: AI-Enabled Advice and the Future of Investor Protection.

To start, we need greater clarity. Although advice should be consistently regulated regardless of the medium, investors also know that not every piece of information they receive about the market constitutes actionable advice. Indeed, investors have long had access to unregulated forms of financial information—be it magazines, books, podcasts, online forums, or social media. Going forward, education on financial topics (such as “What is an ETF?”) can be handled differently from personalized guidance, such as target support and digital nudging, or influence through online design elements. Both are still far away from comprehensive advice—and clarifying these distinctions along a continuum of support will help regulated advisors understand what they can offer, while leaving ample space for responsible innovation.  

From there, we also need consistency. It would not make sense to regulate a human advisor differently if they were meeting a client in person or over Zoom, phoning them, or emailing them. Commonsense investors know that technology is a medium for delivering advice, and policymakers can recognize that functionally equivalent advice—no matter whether it’s delivered by a human, a regulated firm, or an AI tool—should share the same regulatory expectations and apply the same standards. 

Finally, we need to prepare for agentic AI. This means bolstering the core safeguards that have protected investors for decades. That includes everything from know-your-customer requirements to safeguards that protect client information from unauthorized access and use.

There’s no doubt that investors, advisors, and the financial services industry will continue to adopt AI tools. With the right mix of clarity, consistency, and core safeguards, the policy framework around financial advice and AI can make the necessary leap to acknowledge the realities of today and to set the foundation for a safer tomorrow.