Gen Z Uses AI to Pick Funds; Experts Flag the Risks — SkimNews
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- Gen Z investors are turning to AI tools to research stocks, mutual funds and SIPs, but experts caution that AI should complement—not replace—human judgment, discipline and financial planning.
- Amitha A. Jayan, Wealth Manager at Scripbox, warned that AI outputs are "naturally generic" and that fund NAVs, expense ratios or financial metrics can occasionally be outdated, urging double-checks on official platforms before committing.
- Ashwiinii Deshpande, Director at Hitachintak Investservices, cautioned that AI "can calculate, but experience decides which variables and weights are appropriate," adding that AI also misses information the investor never provides.
- In one cited case, an AI tool recommended a second fund in the same category as the investor's existing Flexi Cap Fund—without adequately accounting for portfolio overlap.
- Deshpande flagged an accountability gap, noting that professional fund distribution involves due diligence and suitability—asking who considers taxes and exit loads if an AI-recommended fund switch goes wrong.
- Experts emphasized that SIP investors should avoid using real-time AI-generated market updates to second-guess their strategy, since the strength of an SIP lies in disciplined investing and long-term compounding.
Why it matters: For Gen Z investors using AI to pick funds, the cited case of a duplicate Flexi Cap Fund recommendation shows AI can suggest redundant holdings with no accountability for the taxes or exit loads on subsequent switches. The bottom line: outsourcing fund selection to AI without verifying NAVs, expense ratios and personal risk tolerance can quietly undermine the compounding discipline that drives long-term SIP returns.
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