AI Financial Advisors Have a Trust Problem

Since the launch of ChatGPT in 2022, people have been increasingly asking it a wide array of questions, from daily life to medical advice. Still, early models of LLMs (Large Language Models) quickly became famous for “hallucinating” false facts, reducing the trust people put into AI answers.

Even if this problem has been somewhat reduced in later generations of AI models, the issue of trust persists. This is especially true when personal expertise is lacking, making the user uncertain if they can ever trust the AI output.

Financial advice chatbots, or “robo-advisors”, have been increasingly deployed on multiple investing and brokerage platforms. Because they are much more “controlled” than open generalist LLMs, they tend to give rather solid advice, especially to beginners in investing. So, solving the issue of trust is important not just for AI developers, but also for the finance industry as a whole and for the public that could benefit from more accessible financial advice than the costly human advisors usually reserved for investors with larger amounts of money.

A recent paper investigates this question, written by researchers at the FAST National University of Computer and Emerging Sciences (Pakistan). It was published in Acta Psychologica¹, under the title “Psychological predictors of financial technology adoption: The role of trust, attitude, and demographics in AI based financial ChatBots us”.

Trust  In Robo-Advisors Is Conditional

Previously used only for the most basic customer requests, chatbots have now evolved, thanks to progress in AI, into becoming competent financial advisors, or “financial robo-advisors (FRAs)”.

So far, the discussion around robo-advisors has been focused on technical capability, safety, and compliance with regulations. But in practice, any useful mass adoption will also require the public to trust these tools.

The key metric is the public belief in the dependability, reliability, and capability of robo-advisors to perform proper financial advisory functions.

Another factor is financial attitude, or the openness to new financial tools, risk tolerance, and the perceived value of human versus automated interaction.

In practice, previous research demonstrated that positive financial attitude and openness to robo-advisors go hand-in-hand.

Previous data also pointed out that the socioeconomics and demographics circumstances (gender, age, income, education, etc.) of an individual greatly shape the adoption of financial services.

“Due to higher financial literacy levels and risk tolerance, people aged 65 or below tend to use FRAs more than their counterparts. ”

Of course, consumers of financial services ideally prefer customized, personalized interactions with a human advisor. But the high cost of this service creates a significant gap between the desired service level and the one that banks and investing platforms can actually deliver.

In that context, robo-advisors can become a more equitable alternative, one that can reach underserved populations, but only if enough trust is built so that they are used at scale.

What Can Robo-Advisors Provide?

Education From AI

The use of robo-advisors can open the way to users for advanced investment options, lower fees, and improved access to financial services.

However,  the understanding and usage of such benefits can only be enhanced through education. Previous research discovered that the government’s initiatives in enhancing services like FRAs to become user-friendly and providing knowledge about them can significantly increase the use of such services.

This also makes sense, as users who learned more about finance will categorize the robo-advisors as a trusted teacher, instead of a potentially unreliable seller or financial services.

Such trust will, of course, be contingent on the education provided being of high quality and the advice service being impartial and honest.

Impact Of Gender

It is a well-known fact in research on financial education that it can significantly differ between male and female groups.

It appears that women are a lot more open to using robo-advisors than men. Many explanations can be offered for this difference in attitude, with the causes likely a combination of factors:

• Women exhibit greater loss aversion and conservative investment behavior in traditional financial contexts.
• Direct interactions are more valued by women than abstract data, even if they do not involve a human advisor.
• Lower financial literacy makes the robo-advisors’ services in financial education more useful to women, building trust.

Toward More Trust

So far, despite large-scale accessibility, uptake of roboadviros stays low, especially in developing countries and among those groups that possess low levels of financial as well as digital literacy.

New digital tools tend not to be trusted at first by a large section of the population, and this is even more true for “black box” systems like AI, whose inner workings are generally not understood by the general public.

Such skepticism is also somewhat logical when it comes to serious matters like a person’s own finances or medical conditions, where the burden of proof is on AI systems to be not just as good, but better than trained professional humans, to be trusted as a valid replacement of the human touch.

Still, the potential of this tool is major to improve the financial situation of billions of people, especially those who have never had access to personalized financial advisors until now. As such, resolving the issue of trust is important.

Further studies could help better understand the key factors in the adoption or rejection of robo-advisors, like investigating other demographic moderators, such as income and digital literacy, alongside gender, and offer a more nuanced understanding.

The finding that higher adoption intention of robo-advisors by women, once trust is formed, is also important information. It reveals that reluctance does not stem from a conservative attitude, but rather reveals that women are cautious to trust such systems that can fail; hence, only once that trust is formed, their behavior changes.

Investing In Roboadvisors

Robinhood

Built on the promise of zero transaction fees and a digital-native platform for a new generation of investors trading from their smartphones, Robinhood has quickly grown into a massive investment platform, with 27.7M customers (+1.7 million year-over-year in Q1 2026) and $377B in assets managed through its systems.

At the beginning of 2026 alone, the company expanded its offer further by adding prediction markets and higher leverage for EU customers, new cryptos, etc.

Source: Robinhood

Unhindered by legacy systems, Robinhood has been among the pioneers in adopting robo-advisors and cryptos, while offering more than 2,000+ tokenized stocks.

The roboadvisors service is called Robinhood Strategies, offering pro-level advice for a modic 0.25% annual management fee.

It is also a solid financial education platform through Robinhood Learn, offering extensive beginner and advanced education on investing strategy in general, stocks, options, cryptos, etc.

Source: Robinhood

Overall, Robinhood is a solid platform for investing and a good example of how powerful robo-advisors can be for beginner investors and automating what had been, until now, a privilege for high-net-worth individuals.

Latest Robinhood (HOOD) Stock News and Developments

Study Referenced

^{1. Falak Khan, et al. Psychological predictors of financial technology adoption: The role of trust, attitude, and demographics in AI based financial ChatBots us. Acta Psychologica. 8 June 2026. Article: 107124. Volume: Volume 268. 10.1016/j.actpsy.2026.107124}