Younger Americans are More Optimistic than Older Americans About the Potential of AI to Help Manage Money, According to Northwestern Mutual's 2024 Planning & Progress Study

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Jun 04, 2024, 09:00 ET

Meanwhile, Gen X and Boomers+ are skeptical about "DIY GenAI" for financial planning

Americans are most excited about AI's advanced data analysis to potentially help financial advisors improve planning recommendations

MILWAUKEE, June 4, 2024 /PRNewswire/ -- As artificial intelligence (AI) continues to evolve and fuel debate about its transformative power on business and society, younger Americans are far more optimistic about the technology's potential to help them reach their financial goals. More than half of Gen Z'ers (57%) and Millennials (55%) say they are excited about the impact AI and generative AI (GenAI) tools could have on their financial lives. Meanwhile, older Americans are more skeptical – only 38% of Gen X'ers and 23% of Boomers+ say they are excited. These are the latest findings from Northwestern Mutual's 2024 Planning & Progress Study and the first-ever research findings on AI in the study's history.

According to the survey results, 63% of Gen Z and 57% of Millennials say AI will "improve the customer experience in the financial sector, including with financial planning." Conversely, less than half of Gen X (44%) and Boomers+ (32%) share this sentiment.

AI will improve the customer experience in the financial services sector, including with financial planning.	All	Gen Z	Millennials	Gen X	Boomers+
Yes	47 %	63 %	57 %	44 %	32 %
No	53 %	37 %	43 %	56 %	68 %

I'm excited about the potential of AI/GenAI in the financial services industry.	All	Gen Z	Millennials	Gen X	Boomers+
Yes	41 %	57 %	55 %	38 %	23 %
No	59 %	43 %	45 %	62 %	77 %

When asked to identify the potential benefit of AI Americans' are most excited about when it comes to managing their money, "advanced data analysis" emerged as the top choice. Faster response times, increased efficiencies, improved customer service and greater opportunities for customization rounded out the remainder of the top five benefits.

"Younger generations are more willing to accept having their financial services partners leverage GenAI to manage their money," said Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual. "However, even older generations say they are comfortable with their financial advisor leveraging the technology to ask even better questions and help them build wealth and financial security. The majority believe AI and GenAI can be a fantastic addition for a trusted advisor, helping financial professionals deliver even better results and experiences for their clients. The bottom line is this: artificial intelligence can help organizations find human capacity, not replace it."

The future is human + digital

In a pure side-by-side comparison, the research shows that people trust humans (54%) far more than AI alone (15%) across most core elements of financial planning, from creating a retirement plan to asking a financial question to managing budgets.

Who do you trust more in the following scenarios?	Not sure	Both the same	Artificial Intelligence (AI) more	Humans more
Creating a retirement plan	10 %	19 %	12 %	59 %
Asking a financial question	8 %	20 %	13 %	59 %
Developing a tailored, robust financial plan	11 %	18 %	15 %	56 %
Creating a savings plan	9 %	21 %	14 %	55 %
Making asset allocation decisions, building and managing investment portfolios	13 %	20 %	14 %	53 %
Recommending financial products	11 %	21 %	15 %	53 %
Providing financial savings tips	10 %	23 %	15 %	52 %
Making updates to your personal customer information	10 %	21 %	16 %	52 %
Managing a budget and keeping me on track	10 %	23 %	18 %	49 %
AVERAGE:	10 %	21 %	15 %	54 %

At the same time, the survey shows that people are largely comfortable with financial advisors and providers using AI tools for common tasks like fraud detection, answering service calls and joining meetings, and capturing notes, to more sophisticated tasks like predicting financial trends and modeling financial planning scenarios.

What is your comfort level with financial advisors using AI to…	Very uncomfortable	Somewhat uncomfortable	Somewhat comfortable	Very comfortable	Total Comfortable
Detect fraud	15 %	16 %	38 %	31 %	69 %
Analyze data to predict future trends that could inform decision-making	16 %	20 %	41 %	23 %	64 %
Model and illustrate multiple financial scenarios to better visualize possible outcomes	16 %	20 %	43 %	21 %	64 %
Analyze data related to your financial habits, preferences, decisions and behaviors to identify areas for adjustments / improvements	17 %	22 %	41 %	21 %	62 %
Provide real-time financial guidance	18 %	25 %	39 %	18 %	57 %
Join meetings with you and be responsible for capturing information and prompting next steps	20 %	28 %	37 %	16 %	53 %

What is your comfort level with financial service firms using AI to…	Very uncomfortable	Somewhat uncomfortable	Somewhat comfortable	Very comfortable	Total Comfortable
Answer a straightforward financial question	18 %	20 %	39 %	22 %	61 %
Make updates to your basic customer data	19 %	23 %	37 %	21 %	58 %
Answer service calls and respond to your questions	21 %	26 %	36 %	18 %	54 %
Make updates to your existing financial plan	22 %	28 %	34 %	17 %	51 %

"It's still very early in terms of how far the technology will go, but AI tools are going to allow for the mass automation of tasks, significantly reducing manual work and deeply improving efficiencies across not just financial services, but most industries," said Mitchell. "By alleviating the most tedious and administrative aspects of our work, it will free up precious time to focus on building human connections and deliverables that provide the greatest value. So, it is people who sit at the heart of this digital transformation. The expertise and personalization that financial advisors provide can't be replicated or replaced by AI, but it can be enhanced. That's why we believe the future is human + digital."

People aren't ready to replace humans with AI yet… but signs of cautious trust are there.

The study also explored people's comfort level with AI in a few areas outside of financial planning. While very few are ready to replace humans with AI right away, trust levels in the emerging technology were higher than one might expect. For example, 40% of Americans are either somewhat or very trusting of AI taking over for human umpires and referees in professional sports; 35% say the same about AI taking over for nurses when collecting information such as medical histories and current symptoms during doctor's visits; a third (33%) say the same about AI taking over from artists to produce movies, books, music and paintings; and nearly a third (32%) say the same about AI taking over for educators to teach core curriculum classes.

What is your trust level in leveraging AI / GenAI to take over for…	Very untrusting	Somewhat untrusting	Somewhat trusting	Very trusting	Total Trusting
Human umpires and referees in professional sports	31 %	28 %	28 %	12 %	40 %
Nurses when obtaining your medical history / existing symptoms for your doctor visit	37 %	29 %	25 %	10 %	35 %
Artists to produce movies, books, music, paintings, etc.	39 %	28 %	23 %	10 %	33 %
Teachers and professors for core curriculum classes	40 %	28 %	23 %	9 %	32 %
Humans driving cars (i.e., self-driving vehicles)	42 %	26 %	22 %	10 %	32 %
Parents keepings kids accountable and teaching them about responsibility	45 %	26 %	19 %	9 %	28 %

In forthcoming data sets, the 2024 Northwestern Mutual Planning & Progress Study will explore wide-ranging issues facing Americans spanning retirement income, professional help, generational planning and more.

About The 2024 Northwestern Mutual Planning & Progress Study

The 2024 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual among 4,588 U.S. adults aged 18 or older. The survey was conducted online between January 3 and January 17, 2024. Data are weighted where necessary by age, gender, race/ethnicity, region, education, marital status, household size, household income, and propensity to be online to bring them in line with their actual proportions in the population. A complete survey methodology is available.

About Northwestern Mutual

Northwestern Mutual has been helping people and businesses achieve financial security for more than 165 years. Through a comprehensive planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what's most important. With over $627 billion of total assetsⁱ being managed across the company's institutional portfolio as well as retail investment client portfolios, more than $36 billion in revenues, and $2.3 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to more than five million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. Northwestern Mutual ranked 111 on the 2023 FORTUNE 500 and was recognized by FORTUNE® as one of the "World's Most Admired" life insurance companies in 2024.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance). Not all Northwestern Mutual representatives are advisors. Only those representatives with "Advisor" in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.

¹ Includes investments and separate account assets of Northwestern Mutual as well as retail investment client assets held or managed by Northwestern Mutual.

SOURCE Northwestern Mutual