AI IN INVESTING 2026: THE THREE TYPES YOU NEED TO KNOW

Artificial intelligence has moved from the headlines into everyday investing. This guide sorts it into three types every investor should know, and what each one asks of you before you trust it with your money.

AI is everywhere in 2026. It fills the headlines, the ads and the apps on your phone, and it has moved into the way you save and invest. However, “AI in investing” is not just one thing. It can be broken down into three separate areas: the AI tools you personally use, the AI built into products and services being sold to you, and the AI being used against you to steal your money. Each area is evolving fast. Here is what ADF members need to know about each one before considering the use of AI in their own investing journey.

Personal AI Tools

The first way you will meet AI in investing is through the chatbots you open yourself, such as ChatGPT, Claude, Copilot or Gemini. You might use one to learn what a term means, to have your superannuation statement explained in plain English, or to research and compare products before you decide. It is fast becoming a popular way to get financial information, with nearly one in five Australian adults (17%) now using AI like this, rising to more than one in four among 18-to 29-year-olds (28%), according to AustralianSuper research. The scale is striking enough that Vanguard’s global chief economist, Joe Davis, recently described ChatGPT as “probably the largest provider of financial advice in the world”.

The difficulty is that a chatbot is not a licensed financial adviser, and it does not behave like one. It does not know your full circumstances, it is not accountable for what it tells you, and it can state a figure with complete confidence and still be wrong. This last trait is the riskiest one, because the more assured and polished an answer sounds, the more tempting it is to simply accept it. So when faced with this, a small suggestion is to pause and check the information against a source that is accountable for being right. That might be the product’s disclosure statement, a company’s announcements to the ASX, a government site such as the ATO, your own super fund, or a licensed financial adviser. What it should not be is a second chatbot.

This does not mean that AI chatbots have no place in investing. Moneysmart, suggests thinking of AI as a “friendly commerce or business studies teacher”, good for explaining ideas and pointing you in a sensible direction, but not the one who should be making your decisions. Encouragingly, that is roughly how most people already treat it: AustralianSuper research found that only one in four act on AI advice without checking it against another source, so the healthy instinct is mostly there.

A chatbot is not a licensed financial adviser. Instead, think of AI as a “friendly commerce or business studies teacher”, good for explaining ideas and pointing you in a sensible direction, but not the one who should be making your decisions.

AI in Investment Products and Services

The second way you will meet AI is inside the investment products themselves. Over the past couple of years “AI” has spread right across the investment industry, partly as a genuine capability and partly as a sales and marketing hook. Examples include robo-advisers that build and rebalance portfolios using algorithms, fund managers promoting “AI-powered” or “AI-enhanced” strategies, trading apps that promise “smarter”, faster automated decisions, and superannuation and ETF products that now mention machine learning in their material. The hard part, from where you sit as an investor, is telling which are genuine uses of AI and which are just sales pitches.

When a financial product tells you it uses AI, how would you actually know? The claims usually tell you very little about how the AI is used, how well it has been tested, or how accurate it has proven to be. You cannot see whether it runs the whole investment process or just speeds up the paperwork in the back office. You have no way of knowing how much it shapes what investment you end up holding, how it influences your returns, how the AI would behave if the market changes one way or another, or how safely it handles your money and your personal information.

Fortunately, in Australia there are real safeguards for investors. There is no separate rulebook for artificial intelligence in finance, no AI exemption and no special AI licence. As the National AI Centre explains, existing laws apply to AI just as they apply to anything else, an approach regulators call “technology-neutral”.

In practice that means an AI-driven financial product has to meet the same obligations as any other: it cannot mislead you, the provider generally needs to be licensed, and any personal advice must still be in your best interests.

Just as importantly, ASIC has made clear that responsibility never shifts to the machine. If a licensed company builds AI into its product, that company and its directors remain accountable for what it does.

So before you commit any money, it is worth asking a basic question: what does the AI actually do in the investment product? It is also worth confirming that the provider holds an Australian Financial Services Licence on ASIC’s registers. A well-run company will not mind the questions.

AI in Investment Scams

The third way you will meet AI is the one that can do the most damage, and here AI is definitely not on your side. The same technology that can explain a term or summarise a fund can also be turned into a highly effective tool for fraud, and scammers have been quick to use it. What has changed is not the con itself, which is the age-old promise of easy, high, guaranteed returns, but how convincing and how cheap it has become to run. AI lets a scammer mass-produce polished ads, spin up hundreds of professional-looking websites, write flawless messages in perfect English, and even generate deepfake videos in which a well-known and trusted Australian appears to endorse an investment they have never heard of. MoneySmart warns that criminals now use generative AI to build entire networks of fake endorsements and lookalike sites.

And the scale is not trivial. ASIC reports that Australians lost A$2.18 billion to scams in 2025, with investment scams among the largest categories, and it removed almost 12,000 scam websites in a single year, up 90 per cent on the year before. Part of what makes this wave so dangerous is that the old warning signs have largely disappeared. The clumsy grammar, the broken English and the obviously fake logo used to give a scam away. AI has quietly erased all three, so a fraudulent pitch can now look every bit as professional as a real one. Younger investors are especially exposed. ASIC’s research found that 41 percent of Gen Z had been contacted directly by someone offering to help them invest, usually in crypto, and more worrying still, that 64 percent of them trust the financial information they get from AI. High trust sitting alongside heavy targeting is a combination scammers are only too happy to exploit.

The uncomfortable irony is that these scams often impersonate the very thing the first two sections described. A fake “AI trading bot” promising effortless passive income is borrowing the credibility of legitimate AI investing to part you from your money. Which is why the oldest defence is still the best one. No genuine investment is ever “safe” or “guaranteed”, and no real return arrives without risk, so the moment those words appear next to “AI”, treat it as the clearest possible signal to stop. Be just as wary of anything that reaches you through a social media ad or an out-of-the-blue message, and do not trust a video simply because the face in it is familiar, because that face may well be AI-generated. If something ever looks appealing, slow down and check the provider independently on ASIC’s registers, and if you suspect a scam, or think you have been caught by one, take action immediately, report it to Scamwatch and find out what other actions you can take on the site. A real investment opportunity will still be there tomorrow. A scam is counting on the fact that it will not.