OSC study reveals AI tools may guide Canadian investors, with no significant preference over humans
The Ontario Securities Commission (OSC) has released ‘Artificial Intelligence and Retail Investing: Use Cases and Experimental Research,’ revealing insights into how AI impacts retail investor decision-making.
The report stems from a behavioural science experiment where Canadians were asked to invest a hypothetical $20,000 based on advice provided by three different sources: a human financial services provider, an AI tool, or a 'blended' approach where a human used AI assistance.
The research found that participants who received investment suggestions from a human using AI followed the recommendations most closely. However, this difference was not statistically significant.
Additionally, participants showed no significant difference in adherence whether they received advice from a human or an AI tool, suggesting Canadians may be open to following AI-generated advice.
Leslie Byberg, executive vice president of Strategic Regulation at the OSC, stated, “This research highlights the opportunities AI can create for Canadian investors and market participants.”
“It is important that we are agile and able to harness these opportunities while ensuring investor protection remains at the forefront of how we regulate.”
The OSC also examined AI use cases in Canada and globally, identifying three key areas:
- Decision support: AI tools that provide recommendations or investment advice.
- Automation: AI systems that automate the management of portfolios and funds, including ETFs.
- Scams and fraud: AI systems that either contribute to scams targeting retail investors or help mitigate them, especially those that exploit the AI ‘buzz.’
While AI offers the potential to deliver more affordable investment advice, the report highlights risks, such as the possibility of biased or inappropriate recommendations. Scams and fraud using AI are also identified as serious risks, with the OSC continuing its research on investor protection strategies.
This study builds on the OSC’s existing work in AI, reinforcing the importance of behavioural science in regulatory policy. As AI advances, further research will help market stakeholders better understand the implications for retail investors.
