In a KPMG study, more than half of Gen Z respondents say they would rather use a self-service financial planning tool than work with a human adviser.monkeybusinessimages/iStockPhoto / Getty Images
Oh, hi again. Do you use AI to assist you with any tasks? Turns out, many Canadians are using it to help them manage their money. But what does that mean for human advisers? Let’s dive into it.
The rise of AI advisers
A new study from KPMG this week found that Canadians have different levels of trust when it comes to using technology in their financial planning, and that level depends a lot on age.
More than half (54 per cent) of Gen Z respondents said they’re more likely to use a self-service financial planning tool than a human adviser if it was available to them, the highest of any generation. Baby boomers, on the other hand, still prefer the human touch: 56 per cent said they’d rather work directly with an adviser. Millennials seem to want the best of both worlds, with 41 per cent favouring a mix of digital tools and human guidance, while Gen Xers were almost evenly split across all three options.
“The future of financial planning lies in leveraging the efficiency of technology with the empathy of human interaction,” said David Bardsley, national leader of KPMG in Canada’s wealth management practice, in a statement.
Overall, more Canadians are turning to AI for help managing their money. A 2024 Bank of Montreal report found that one in three Canadians use AI tools for things such as setting household budgets or learning about investing.
The Globe and Mail recently put this to the test: We asked ChatGPT to answer some basic personal finance questions, then human advisers evaluated its answers. The verdict was that the chatbot’s advice was generally sound but pretty generic.
Still, for younger Canadians whose finances are fairly straightforward, that may be enough … and it’s free. Some readers even noted after that story was published that when you ask more specific questions, the AI’s answers get sharper and more useful.
The landscape for financial advice is shifting, and as AI technology becomes more capable and more widely adopted, financial advisers may have to find new ways integrate more AI tools to help Canadians with their finances.
The Calculator ~30%
Share of employed people in their 70s who are self-employed, according to a new study from Washington University in St. Louis, which is almost double the share of self-employed people in their 60s.
There are a few reasons this might be happening in the U.S., according to The Wall Street Journal. Some older adults simply don’t want to slow down and are finally putting long-held business ideas into action. Others may be looking for extra income as longer lifespans stretch out retirement.
It reminded me of my recent story about “granfluencers,” retired Canadians who are finding purpose (and a bit of profit) by building followings on platforms such as TikTok and YouTube.
Are you self-employed in your 70s or older? I’d love to hear from you. Email me at mraman@globeandmail.com.
The Retirement Receipt Open this photo in gallery:
Ann-Marie owns a condo worth about $950,000 that still has a $345,000 mortgage, and has saved diligently over the years.Galit Rodan/The Globe and Mail
Should Ann-Marie, 60, sell her condo so she can spend $100,000 a year in retirement?
The numbers: Ann-Marie earns $125,000 a year working for the federal government and has a defined-benefit pension that will pay about $68,000 annually. She owns a $950,000 condo with a $345,000 mortgage, has $473,000 in RRSP savings, and about $62,800 in her TFSA.
The situation: She wants to retire at 62 and spend about $100,000 a year after tax – enough to maintain her lifestyle, travel, explore hobbies and help her aging parents – without running out of savings.
Key steps, from a financial planner: Ann-Marie can meet her goal if she sells her condo and rents, freeing about $630,000 to invest after paying off her mortgage. Keeping the condo would mean depleting her savings by age 67. Deferring CPP and OAS to 70 would increase guaranteed income and reduce the risk of clawbacks, while continuing to build her TFSA would add flexibility in retirement.
Have Your Say
Have you recently received an inheritance, whether it was a financial gift, a family pet or an unexpected heirloom? What did you do with it? Send us an e-mail.
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Try This
💸 Tell your kids what they’ll inherit. Parents who talk openly about inheritance give their children a chance to plan earlier in life, when it’s most useful. Even a ballpark figure can help with big goals like buying a home or saving for retirement, says financial planner Anita Bruinsma. Bonus: Early gifting can also cut probate fees and taxes later on.