Swissquote Survey Finds Most Luxembourg Investors Remain Cautious About AI-Driven Investing

On Tuesday 26 November 2024, Swissquote Bank Europe revealed the results of its inaugural Luxembourg Investment Study.

The survey, commissioned by Swissquote Bank Europe in collaboration with ILRES, highlighted a cautious approach toward artificial intelligence (AI) among Luxembourg investors. While many were open to receiving AI-generated investment advice, the majority were not comfortable handing over control of investment decisions to AI.

The survey found that only 3% of Luxembourg investors would entrust AI to manage their investments autonomously. Meanwhile, 24% of investors expressed outright refusal to trust AI-generated investment advice. Some investors said they were willing to integrate AI, but only under specific conditions. 43% of participants said they would be open to AI-based advice, provided they have the final say. Another 25% of respondents indicated they would consider using AI advice only once the technology becomes more tightly regulated.

Swissquote noted that AI is transforming the investment landscape as investors increasingly incorporate generative tools such as stock selection algorithms and machine learning models into their strategies. While AI adoption is gaining momentum in Luxembourg, the survey revealed that most investors prefer to use these tools as assistants, maintaining control over final decisions rather than allowing AI to act independently.

Attitudes towards AI were found to vary significantly across generations. Baby boomers were most sceptical, with 59% of investors aged 59 years and above expressing discomfort with AI-led investments, even if regulatory improvements would be made. In contrast, most Gen X and Millennial investors (aged 27-58) displayed a more positive outlook on AI, indicating growing acceptance among younger generations. However, Gen Z investors were notably more cautious, with one-third of respondents aged 18-26 preferring to wait until the appropriate guardrails are in place before accepting advice from an AI.

The findings were published in Swissquote Bank Europe's Investment Survey of Luxembourg residents for 2024. The study is based on interviews with 1,087 Luxembourg residents between 15 and 30 April this year. Both ILRES panellists and Swissquote clients participated in the survey.

Jeremy Lauret, Head of Direct Investing at Swissquote Bank Europe, said: "Investors have long used technology to assist their investment decisions, but not as a replacement for decision making. AI promises to make it easier for investors to process vast amounts of information, helping investors to identify and evaluate investment opportunities. This could further level the playing field in favour of individual investors while also helping professional investors and institutions improve operational efficiency and enhance service quality to their clients".

"Regardless, 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," he continued.

Reluctance to adopt AI in their investment process has not stopped Luxembourg investors from investing in the technology. Over 60% of investors surveyed said they are willing to get portfolio exposure to tech companies with AI capabilities, the most popular thematic trend in 2024. Other popular thematic trends this year include finding value in small and mid-cap stocks and hedging geopolitical risks through commodities, noted Swissquote.

Other key findings included the facts that: cryptocurrencies were popular among young investors; few Luxembourg residents consider ESG criteria when investing; most investors want to grow their wealth but lack a financial plan.