“We expect investors, whether they manage portfolios themselves or with the help of a professional, to continue to value human trust and personalised attention that technology cannot easily replace,” said Jeremy Lauret, head of direct investing at Swissquote Bank Europe, in a press statement on Tuesday 26 November 2024. Photo: Swissquote Bank Europe

“We expect investors, whether they manage portfolios themselves or with the help of a professional, to continue to value human trust and personalised attention that technology cannot easily replace,” said Jeremy Lauret, head of direct investing at Swissquote Bank Europe, in a press statement on Tuesday 26 November 2024. Photo: Swissquote Bank Europe

A Swissquote survey found that only 3% of Luxembourg investors trust AI for autonomous portfolio management, with 24% outright rejecting AI-generated investment advice, suggesting a strong preference for retaining control over their financial decisions.

Luxembourg investors show less trust in AI-generated investment advice and prefer to maintain control over their financial decisions, refusing to let AI manage their portfolios autonomously, according to a recent survey by Swissquote Bank Europe. Conducted with market research firm Ilres, the survey, published on Tuesday 26 November 2024, highlighted this reluctance to embrace AI-driven autonomy. It also revealed significant generational differences in trust and adoption, with most investors hesitant to relinquish control to automated systems, despite the growing use of AI.

Trust in AI

The survey revealed that only 3% of Luxembourg investors were willing to allow AI to manage their portfolios autonomously. In contrast, 24% expressed outright distrust of AI-generated investment advice. A significant portion of respondents showed conditional acceptance: 43% were open to using AI for investment advice provided they retained the final decision-making authority, while 25% indicated they would consider AI-based advice only after tighter regulatory frameworks are established.

Generational attitudes

Generational differences were evident in attitudes towards AI. Baby boomers, defined in the survey as those aged 59 and above, were the most sceptical, with 59% uncomfortable with AI-led investments even if regulatory improvements were made. Meanwhile, Gen X and millennials (ages 27 to 58) demonstrated greater openness to AI integration, reflecting growing acceptance among middle-aged investors. Interestingly, Gen Z (ages 18 to 26) displayed caution, with one-third preferring to wait for robust regulatory safeguards before considering AI-generated investment advice.

Despite hesitancy in adopting AI for portfolio management, Luxembourg investors showed significant interest in other AI-driven technologies as an investment opportunity. Over 60% of respondents were willing to gain portfolio exposure to tech companies with AI capabilities, making it the most favoured thematic investment trend of 2024. Other popular trends included exploring value in small and mid-cap stocks and using commodities to hedge geopolitical risks.

Cryptocurrency

Cryptocurrencies continued to resonate with younger investors, particularly those in Gen Z. Nearly one-third of Luxembourg investors reported holding at least one cryptocurrency. Among these, 40% included cryptocurrencies in their long-term investment strategies, while the remaining 60% considered them occasional investments. Within Gen Z, 47% actively invested in the digital asset class, underscoring its popularity among this demographic.

ESG

Despite Luxembourg’s prominence as a hub for sustainable finance, only 8% of investors reported applying environmental, social and governance (ESG) criteria to their investment decisions. In contrast, 62% did not factor ESG considerations into their choices. Notably, a third of respondents expressed interest in understanding the ESG impact of their portfolios but did not systematically apply inclusion or exclusion criteria.

Financial planning

The survey also highlighted significant gaps in financial planning. While the majority of respondents participated in financial markets to grow their wealth, 60% lacked a documented financial plan. Even among high-income earners--those with a gross annual income exceeding €220,000--only 25% had formalised a financial plan. Another third of high earners acknowledged considering a plan but had not taken steps to document it, suggesting that financial planning was not a priority even among the wealthiest.

Broader implications 

, head of direct investing at Swissquote Bank Europe, emphasised that while technology, including AI, has become an indispensable tool for processing vast amounts of investment data, it is unlikely to replace human decision-making. Lauret stated that investors continue to value trust and personalised attention, which technology alone cannot replicate. The report suggested that AI, when used as an assistant rather than a decision-maker, could help level the playing field for individual investors while enhancing efficiency and service quality for professionals.

The findings were based on interviews with 1,087 Luxembourg residents, conducted between 15 and 30 April 2024. Participants included both Swissquote clients and Ilres panellists.

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