AI-Based Financial Advice: An Ethical Discourse on AI-Based Financial Advice and Ethical Reflection Framework

This article presents a first step in identifying the ethical issues of AI-based financial advice. Consumers must navigate an ever more complex array of financial decisions. (Generative) AI-based financial advice may increase access to and acceptance of financial advice and strengthen consumers’ financial well-being. However, significant ethical challenges exist in designing, developing, and deploying AI-based financial advice. To analyze the perils and pitfalls of AI-based financial advice, the authors develop a definition of what constitutes good AI-based financial advice and provide a first assessment of ethical challenges related to AI-based financial advice. The iterative multistakeholder approach, including workshops and semistructured interviews with consumers and experts, results in an ethical discourse structured around the four fundamental values of the European Commission's Ethics Guidelines for Trustworthy AI—human autonomy, explicability, fairness, and prevention of harm—and trust as the overall objectives. Based on the analyses, the authors derive a simple yet comprehensive AI Ethics Framework for Financial Advice. This reflection framework guides public policy makers, managers of financial service providers, and technology developers in incorporating ethical discourse in developing and deploying (generative) AI-based financial advice.