Younger Americans see greater potential in the use of artificial intelligence (AI) than older Americans and want financial advisors to incorporate it more into their business model, according to a Northwestern Mutual survey.
For the first time as part of its 2024 Planning & Progress Study the Milwaukee-based firm surveyed 4,588 U.S. adults about their thoughts on AI and found that the level of comfort in the technology was divided among age groups.
For instance, 57% of members of Generation Z and 55% of millennials said they are excited about the impact AI and generative AI (GenAI) could have on their financial lives. In comparison, only 38% of members of Generation X and 23% of baby boomers and those older (boomers+) said that they are excited.
“Younger generations have just grown up in a more technologically rich context so it’s just more natural for them to lean into AI,” said Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual. “They just have an innate comfort or interest in AI as being a part of their lives, so we really believe that’s what’s driving the discrepancy we see across the various age bands.”
The age breakdown for the survey is Generation Z consists of those between 18 and 27, while millennials are 28 to 43, Generation X are 44 to 59 and those 60 and older are boomers and boomers+, according to the firm.
The younger generations are also far more optimistic about the long-term ramifications of AI, with 63% of Generation Z and 57% of millennials saying AI will help make improvements to customer service, including financial planning. That belief is shared by 44% of Generation X and 32% of boomers.
The respondents listed several benefits they believe will come with AI, with advanced data analysis the most popular. Others included faster response times, increased efficiencies, improved customer service, and greater opportunities for customization, the survey found.
Despite the enthusiasm about AI, most respondents still want to have a human involved particularly in their finances. Fifty-four percent said that they trust humans more, compared with 15% who said they would trust AI alone across various aspects of financial planning.
Specifically, 59% of those surveyed said they trusted a human more in creating a financial plan and when asking a financial question. Meanwhile, the level of comfort respondents had with AI came to such things as detecting fraud, analyzing data to predict future trends, as well as service calls, and making updates to the existing plan.
One of the reasons many feel comfortable with AI in updating a plan is because if a client goes off track in that plan, the AI will not offer criticism or judgment instead of a human advisor, Mitchell speculated.
The survey respondents want to maintain their relationship with their advisor and keep that human interaction. At the same time, they also want advisors to incorporate AI more into their daily lives, he said.
“We really do see, near term, this desire for human intimacy,” Mitchell said. “I think the longer-term prospect here though is we see a lot of consumer comfort around advisors using AI to give better answers [and] to provide better service.”