How to use artificial intelligence in financial planning
Artificial intelligence (AI) is the latest hot technology. But most people are primarily using AI for internet searches,¹ which means they aren’t yet tapping into the technology’s full potential, especially when it comes to financial planning. Your employees see you as a trusted source of information, so you have a unique opportunity to help them make the most of AI. Share these tips to help them use AI safely and smartly when it comes to their finances.
How employees feel about finances
In 10 years of asking retirement plan participants about their finances,² we’ve learned that 75% of workers worry about finances at work, and this negatively affects their productivity. In 2024, we discovered:
- 41% of workers are unhappy with their financial situation
- 50% believe their retirement savings are falling behind
- 47% of workers feel their finances are causing stress
- 53% don’t feel knowledgeable about investments
But we also know that workers look to trusted sources for help when making financial decisions—including you:
- 66% from their retirement plan provider
- 58% from their financial advisor
- 47% from their employer
Using AI in financial planning
The recent growth of AI tools gives you an opportunity to help your workers improve their financial well-being. Here are some ways AI can help:
- Creating a budget
- Suggesting retirement plan contribution and savings rates
- Tracking expenses and analyzing spending habits
- Determining how much risk someone is willing to take
- Monitoring transactions to detect possible fraud
- Providing education information on financial topics
- Answering common financial questions such as eligibility ages for Social Security
But as you know, AI tools, while helpful, also come with potential pitfalls and must be used responsibly. Keep these tips in mind when using AI:
- Check for accuracy and consistency—AI can sometimes give wrong answers because of the data and algorithms uses. The answers you get may change depending on how a question is asked, so it may be best to use the information just as a starting point for research.
- Use human judgment—While AI can offer helpful research and information, your employees should still think about what makes sense for their personal situation and retirement goals.
- Consider the source—Information from AI isn’t always reliable. AI is frequently guilty of copying without giving credit, making up information, showing bias, or using outdated sources.
Some pros and cons of AI in retirement planning
| Pros | Cons |
| Simplifies and speeds up answering simple questions | Has limited understanding of unique situations and ability to offer truly personalized guidance |
| Offers personalized guidance based on information each employee shares | May have issues with data being properly protected |
| Quickly calculates questions such as how much to save or how long it takes to reach goals | Lacks human interaction and emotional support |
| Keeps track of savings and investments | Makes mistakes |
| Analyzes market and economic trends | Doesn’t consider opinions of your employees or financial professionals |
Consumer trust is an issue for AI in financial planning
John Hancock and the MIT AgeLab are collaborating on a five-year research study to help improve quality of life for an aging population and their loved ones. The MIT AgeLab recently studied people’s attitudes about the use of AI in several areas and found that the jury is still out for many consumers when it comes to trusting AI with their personal finances.
A divide in willingness to use AI
Across different financial applications, a split appeared in consumers’ willingness to adopt or use AI. People are more likely to say they would use AI to help them develop their financial plans—both short and long term—than to entrust the actual management of their retirement savings to AI. Trust is important in finance, which may be why it’s hard to replace humans, even as machines get better at handling financial tasks.
Consumer willingness to use AI in financial tasks (%)
Source: MIT AgeLab, 2023.
Demographic differences in attitudes
The willingness to use AI as a robo-advisor differs with generation, gender, and income. Generally, older generations are significantly less willing to use a robo-advisor than younger ones, but Generation Z was an outlier. Their familiarity with technology and social media seems to have made them more cautious in their approach to AI. Men were more willing to use a robo-advisor than women, and people with higher incomes were typically more willing to use a robo-advisor.
Consumer willingness to use robo-advisors
Sentiment based on a scale of 1 to 4, with 1 meaning "not at all willing" and 4 meaning "very willing"
Source: MIT AgeLab, 2023.
Key AI concepts
Understanding basic AI terms can help you educate your employees on how to interact responsibly with AI.
AI glossary
| Artificial intelligence | Technology that allows machines to think and learn like humans; allows computers to do tasks that usually need human intelligence, such as responding to natural language, recognizing objects, making decisions, and solving problems; uses data and algorithms to improve its performance over time, making it smarter and more capable |
| Neural networks | A type of computational model inspired by the human brain, used in various AI applications to process and analyze large sets of data, recognize patterns, make predictions, and solve complex tasks |
| Generative AI | A type of AI that can generate new content, such as text, images, or even music, from scratch or by completing existing examples; designed to produce outputs based on patterns learned from large datasets |
| Large language model (LLM) | Advanced AI systems leveraging neural networks trained on extensive text data to understand and generate human-like text |
| Chatbot | Programs designed to simulate human conversation, typically through voice or text interactions, and provide automated responses and assistance to users; OpenAI’s ChatGPT and Google’s Bard are examples of chatbots powered by LLMs |
Adopting AI in financial services
While AI is getting a lot of press, its use in financial planning is still fairly new, so many people are cautious about its value and benefits. You can help educate your employees on how to use AI when managing their finances.
1 “What CR Found Surveying Americans about Generative AI,” Innovation at Consumer Reports", Consumer Reports, 4/4/2024. 2 2024 financial resilience and longevity survey, John Hancock Retirement, 11/1/2024.
Important disclosures
John Hancock commissioned Edelman Public Relations Worldwide Canada to conduct the 2024 financial resilience and longevity survey. John Hancock and Edelman Public Relations Worldwide Canada are not affiliated, and neither is responsible for the liabilities of the other.
John Hancock is not affiliated with the Massachusetts Institute of Technology (MIT) AgeLab, and neither is responsible for the liabilities of the other.
Intended for plan sponsors
The content of this document is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made.
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