Younger Canadians are turning to AI for financial advice, in part to not ‘feel judged’ — and it could be a problem

Younger Canadians in search of low-cost and low-pressure avenues for financial advice are turning to artificial intelligence tools in higher numbers than other demographics, according to a recent survey.

Nearly half (47 per cent) of young Canadians aged 18-34 said they sought online advice over the past year, according to a report released this week by Money Mentors, an Alberta-based non-profit credit counselling agency, in partnership with Angus Reid.

Among generation Z, 37 per cent said they used social media, including TikTok, Instagram, YouTube or Reddit, and 22 per cent said they used AI tools , such as ChatGPT, Claude and Gemini — the highest use of these sources across all generations for financial guidance.

Overall, about one in three Canadians sought financial information online over the past year, with 15 per cent turning to AI tools and 16 per cent using social media, according to the survey.

“(Canadians) prefer to educate themselves first,” said Stacy Yanchuk Oleksy, chief executive officer of Money Mentors. “Online is more accessible, and … it’s relatable, especially if it’s social media.”

Nearly three-quarters of younger Canadians who use online sources for financial information said these resources can be accessed quickly, while 46 per cent said they feel relatable, personal or easy to understand.

About 39 per cent of younger respondents said they prefer educating themselves before speaking with a professional, 30 per cent value being able to access information anonymously and 27 per cent say they can get advice online without feeling judged.

“When it comes to money, there’s a deep amount of shame associated with it, especially debt and credit issues,” Yanchuk Oleksy said. “You don’t get judged by ChatGPT, whereas perhaps you might feel judged by your banker.”

Yanchuk Oleksy said there is more social acceptance among younger Canadians when it comes to tapping into technology as a financial resource , especially when they are unsure whether their situations warrant seeking or paying for professional advice. “I think they’re turning to those sources because they’re low-barrier entry — they’re low cost or no cost.”

In fact, about 28 per cent of younger respondents in the report said they don’t feel their situation is serious enough to warrant professional advice, and 20 per cent said the cost of professional advice is deterring them from seeking it.

The top three financial decisions that younger Canadians cited using online information for included savings decisions (42 per cent), budgeting and day-to-day money management (42 per cent) and investment choices (41 per cent).

But Yanchuk Oleksy and regulator groups have concerns about the use of AI tools for financial advice.

“It’s unregulated and uncontrolled,” Yanchuk Oleksy said. “Financial advice needs to be tailored to an individual.”

The Ontario Securities Commission (OSC) and other regulators across the world are actively studying AI as it is increasingly being used for financial information and advice, especially amid a rise in do-it-yourself investing, an OSC spokesperson said.

The OSC warned there are several risks when it comes to using AI tools for financial guidance, such as biases (for example, toward a particular company’s products) and the potential for poor data quality.

There are also concerns with bad actors using these tools to commit scams. The Canadian Investment Regulatory Organization cautions on its website about sharing personal information online and noted AI can help enable personalized fraud attacks and account takeovers.

And the OSC said the “black box” nature of AI systems and limitations around data privacy and transparency means there is less accountability in situations where AI recommendations lead to adverse outcomes for investors.

“Treat AI as a starting point for investing decisions, not a final decision maker,” the OSC advised, adding that Canadians can verify AI recommendations with trusted or regulated sources.

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