The safety net your children think they have (and don’t)

The FCA published new research this week on how 18 to 40 year olds make investing decisions. One line in it should catch the attention of any family with wealth to pass on: nearly a third of young investors wrongly believe they’d get their money back through the Financial Services Compensation Scheme or the Financial Ombudsman if AI investing advice went wrong.

Trust has moved faster than protection

56% of young investors surveyed said they trust AI tools with their investing questions, ahead of TV and radio, the press, and social media influencers. Two in three expect to lean on AI even more over the coming year. Trust has clearly shifted. Understanding of what that trust actually buys them hasn’t kept pace.

What the gaps actually mean

Three findings stand out. 44% of respondents think AI-generated financial information is regulated. It generally isn’t, unless the tool has been built specifically to give financial advice. 38% think it’s fine to make an investment decision based solely on AI output, with no second opinion. And 32% believe they’d be compensated if that advice turned out to be wrong. None of that protection exists for a general-purpose chatbot.

To be fair, the same research found real caution too. 73% know AI can be inaccurate, and 86% said they’d check its sources. The instinct is sound. It just isn’t the same as regulated advice, and it isn’t the same as a safety net.

Why this matters for succession, not just investing

Most family wealth planning focuses on the technical transfer: trusts, tax, timing. This research is a reminder that the human side matters just as much, particularly for the generation who’ll eventually hold that wealth. A well-structured plan can still come undone if the people inheriting it are making day-to-day decisions on a false sense of protection.

We handle both sides of succession for exactly this reason. The technical structures only work well when paired with a family that understands how to use them.

A starting point, not a lecture

None of this calls for a crackdown on how your children or grandchildren research money. It calls for a conversation, ideally before a decision goes wrong rather than after. Ask what tools they’re already using. Ask what they think would happen if a piece of AI advice turned out to be bad. The gap between what they assume and what’s actually true is usually the most useful thing to surface.

Where we can help

If you’d like a hand starting that conversation within your own family, or want to check the next generation’s understanding matches the plan you’ve built for them, we can help. If you’re an existing CH client you can talk this through with your Financial Planner. If you’re not yet a client, we offer a free initial phone call with one of our qualified Financial Planners. Click here to book your conversation, or call us on 01509 610472 to speak with our team.