AI Drives Growth in Robo-Advisory Market as Retail Investors Turn to ChatGPT for Stock Picks

The rise of artificial intelligence is reshaping retail investing, with tools like ChatGPT increasingly influencing how individuals select stocks. As ChatGPT nears its third anniversary, around 13% of retail investors globally are using AI chatbots to guide investment decisions, fueling rapid growth in the robo-advisory market. Analysts predict the sector will expand from $61.75 billion in 2024 to $470.91 billion by 2029, as fintech firms, banks, and wealth managers integrate AI into automated financial advice platforms.

Jeremy Leung, a former UBS analyst, highlights both the promise and limitations of AI in investing. While AI can streamline workflows and generate stock recommendations quickly, it often lacks access to proprietary data behind paywalls, potentially leaving out key insights. Leung cautions that AI should complement, not replace, human judgment in portfolio management.

Surveys suggest widespread adoption of AI-driven tools. About 50% of global investors express willingness to use AI for portfolio decisions, and 13% actively rely on them. In the UK, 40% have sought guidance from chatbots or other AI-based advisory services, signaling growing comfort with algorithmic support in investment strategies.

Experts warn, however, that general-purpose AI models like ChatGPT can misquote information, over-rely on historical data, or present analyses based on outdated sources. Dan Moczulski, UK managing director at eToro, stresses the importance of using AI platforms specifically trained to analyze financial markets to avoid misleading outputs.

Despite these risks, real-world results show potential. A portfolio of 38 stocks recommended by ChatGPT in 2023 outperformed the average UK fund by nearly 19 percentage points. Analysts emphasize that investors should structure prompts carefully and combine AI guidance with human oversight, especially to manage risk during volatile market conditions.

The convergence of AI and finance underscores a broader shift in retail investing, suggesting that intelligent automation will play an increasingly central role in shaping future investment strategies.