Artificial intelligence could soon become an important tool in helping Canadians navigate increasingly complex financial choices, according to a new report from the C.D. Howe Institute.
With traditional pensions fading and financial products growing more intricate, Canadians are now responsible for managing a wide range of decisions — from mortgages and debt to insurance and investments — that carry long-term consequences if mishandled, the report notes.
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“Households are now in the cockpit — flying through turbulence with a crowded dashboard in front of them,” said report co-author Pierre-Carl Michaud.
The think tank argues that AI has the potential to improve financial literacy, offer real-time guidance, and make financial advice more accessible and affordable. However, it stresses that human oversight and strong government regulation must remain central to prevent costly missteps.
Public conversational tools such as ChatGPT, Gemini, and Copilot could serve as “literacy boosters,” helping users understand core financial concepts and providing just-in-time education during key life events like buying a home or planning for retirement, Michaud said.
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Still, the report cautions that the reliability of AI-generated information remains a concern. Michaud suggests regulatory bodies and professional organizations, such as FP Canada, could develop their own AI-powered systems trained on certified expertise. These could be made freely available to the public and promoted at critical financial milestones.
AI also offers benefits for financial advisors, enabling them to process vast amounts of data, personalize recommendations, and automate parts of the advisory process. Yet, both public and private AI tools are vulnerable to “hallucinations,” or the generation of false information.
“The stakes are enormous for large financial institutions, even if the likelihood of an error is small,” Michaud said. “It’s hard to imagine a world where consumers fully depend on AI-driven advice.”
One proposed solution is for AI systems to generate advisor-approved recommendations, giving clients pre-vetted options that still allow for personalized guidance. Such an approach could be particularly valuable in complex financial planning scenarios — for instance, balancing investment and insurance products during the decumulation phase of retirement.
Ultimately, Michaud emphasizes that policymakers must establish clear rules for how AI can be safely and effectively integrated into financial services. These should include standards for auditing, transparency, human oversight, data privacy, and model risk management.
“This is achievable,” Michaud concludes, “and many governments are already taking steps to strike the right balance between AI’s benefits and its potential risks.”
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