Young Canadians Increasingly Turn to AI for Financial Advice, Skipping Licensed Brokers

A new national survey indicates a significant shift in how younger Canadians seek financial guidance, with artificial intelligence (AI) tools now surpassing licensed professionals. The Real Estate and Mortgage Institute of Canada (REMIC) and Abacus Data found that 26% of Canadians aged 18 to 29 utilized AI tools like ChatGPT for financial or mortgage advice in the past year, while only 17% consulted a licensed mortgage broker or financial advisor. This development unfolds during what is projected to be Canada's peak mortgage renewal year, highlighting a growing reliance on unregulated AI advice.

The survey's findings underscore a clear generational divide in financial advisory preferences. While AI adoption is prevalent among the youth, the pattern reverses with age; only 3% of Canadians aged 60 and over used AI for financial advice, compared to 12% who engaged a licensed broker. A particularly concerning aspect is that half of the 18-29 age group either believe AI financial advice is regulated or are unsure of its regulatory status. Nationally, a mere 9% of Canadians believe that AI chatbot mortgage advice is regulated in the same manner as advice from a licensed broker.

This emerging trend is expected to have notable implications for financial markets and the advisory sector. Nearly three in ten (29%) young Canadians aged 18 to 29 who made a financial or mortgage decision based on AI or social media influencers reported experiencing negative or mixed outcomes. Furthermore, 13% of homeowners in this age bracket intend to rely primarily on AI or online tools for their upcoming mortgage renewal, a stark contrast to just 4% of all homeowners. This indicates a potential for unregulated advice to lead to suboptimal financial decisions and expose young consumers to increased risks.

In the broader economic context, this trend carries significant weight, especially given Canada's current landscape of household debt and mortgage market sensitivity. The nation is navigating a period of heightened mortgage renewals amidst high inflation and interest rates. Under these conditions, an overreliance on unregulated AI advice could exacerbate financial instability risks and potentially deepen debt issues, particularly among the younger generation. Joe White, Founder and CEO of REMIC, articulated this as a “consumer protection gap,” emphasizing that Canada has yet to determine its response.

Analysts and market experts acknowledge that the rise of AI in financial advisory services presents both opportunities and challenges. While AI has the potential to enhance financial literacy by offering quick access to information and personalized analyses, multiple studies indicate that AI programs can provide inconsistent, inaccurate, or biased recommendations for personal finance. Experts suggest using AI as a starting point for financial inquiries but caution against treating it as a final authority. Moving forward, regulatory bodies are anticipated to address this gap, implementing measures to better inform consumers about the inherent risks associated with AI-driven financial advice.