AI FOR ALL AGES: HOW DIFFERENT GENERATIONS USE AI IN FINANCIAL PLANNING
Artificial intelligence (AI) in financial planning is like self-checkout in mass-market retail.
Stick with me …
Remember when self-checkouts seemingly came to the rescue in the early 2000s? Quicker checkouts. “Yes, please!” Shorter lines. “I’m in!” No more small talk with the cashier. “Best part!”
Years into it, reality is shaping a different story. Tech difficulties occur; it takes people longer to check out; theft is on the rise. The takeaways aren’t always golden, like this one in a HuffPost article, “I think they’re generally inefficient and people prefer to talk to a person.”
AI is a long way from seeing a similar dip in popularity. In fact, it’s commanding a growing presence in our lives, including in financial planning. Here’s our take on its future.
But, as we’re discovering with self-checkouts, it’s not an end-all solution or replacement for human interaction. People generally prefer to talk to a person for trusted guidance, and AI simply can’t match the level of personal empathy and holistic expertise that human financial advisors offer.
The real question as we move ahead with AI is how we choose to use it and, digging deeper, how different generations can benefit from it. Here’s a look at how we’re doing, from Gen Z and millennials to Gen X and baby boomers.
MILLENNIALS (1981-1996) and GEN Z (1997-2012)
Younger generations readily use AI products but still rely on personalized advice for big decisions and overall guidance. According to Northwestern Mutual’s 2024 Planning & Progress Study, more than half of Gen Z (57%) and millennials (55%) say they are excited about AI and its tools that can benefit their financial lives.
How they’re using AI in financial planning:
For tracking spending and budgeting—to analyze spending habits and identify areas for improvement and create and stick to a budget.
To learn about investments—and gain personalized insights and tutorials on financial concepts to better understand investment basics. For tax planning and filing—and help with tax planning and filing by analyzing financial data and identifying potential tax deductions.
For retirement planning—by helping estimate future income needs and develop a savings strategy.
Popular platforms and tools:
Cleo and Bright—chatbots that connect to users’ bank accounts to break down spending habits, help pay off debt and build credit.
Robo-advisors—automated financial planners that offer personalized investment advice and portfolio management.
Personal wealth manager co-pilots—tools to track spending, learn investment basics, build diversified portfolios and access personalized insights and tutorials on financial concepts.
GEN X (1965-1980) and BABY BOOMERS (1946-1964)
Older generations, including Gen X (44%) and baby boomers (33%), aren’t as eager to embrace using AI in their financial planning and wealth management strategies, says the same Northwestern Mutual's 2024 Planning & Progress Study.
They do, however, use AI in financial planning through tools like robo-advisors, estate planning software and AI-driven financial news and analysis tools. For these generations, AI isn’t their go-to planning partner but rather a resource to help them with investment decisions and estate planning, and to stay up to date on market trends.
How they’re using AI in financial planning:
Automate routine tasks—like paying bills on time and budget tracking.
Boost financial knowledge—to analyze spending patterns and provide real-time insights into financial health for better monthly budgeting.
Manage debt—setting up personalized notifications to alert them to unusual transactions, upcoming bills or potential overspending.
Protect them from fraud—by setting up extra security and levels of online protection to suppress fake ads and social media accounts as well as malicious sites.
Popular platforms and tools:
Robo-advisors—platforms like Betterment and Wealthfront offer automated investing and financial planning services.
Financial management—AI-powered personal finance like Mint and Rocket Money help automate bill pay, find and cancel subscriptions.
AI at Alia—and every generation
AI is quickly winding its way into most every area of our lives, including our money and planning for the future. But it’s unlikely to replace human financial planners who still provide essential personalized, nuanced advice based on your unique situation and goals.
At Alia, AI is enhancing our level of service by automating routine tasks and providing data-driven insights, so we can better focus on developing plans that meet your financial goals. We view AI as a tool to deepen our level of service for Possibilities. Made Possible. But we’ll still always know your children’s names.
Contact Lindsey and her team today to learn more.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
