Article

From Recommendation... to Artificial Intelligence

How Has Investor Trust Changed?

If you want to know how the investor has changed over the past decades, do not look at the speed of markets, nor the development of screens, nor artificial intelligence. Just look at one question that has been changing with time:

To whom does the investor grant his trust when making his decision?

This question, in my opinion, sums up the entire investment journey.

When modern financial markets began, the investor knew only himself. He would carry the paper stock certificate, go to the broker, listen to the news, then decide alone. Information was limited, access was harder, but the responsibility for the decision was clear; if he was right, it was to his credit, and if he was wrong, it was on him.

As markets expanded, trading halls appeared that many investors remember. Some of them would spend long hours in front of screens tracking price movements, then ask a bank employee or broker to execute the trade. Later, markets moved to computers, then to bank websites, then to smartphone apps, until executing a buy or sell order took no more than seconds.

Despite all this development, one thing remained constant. The investor is the one who decides.

But the truth is that the investor did not rely on information alone, but also on trust.

A whole generation of investors remembers days when a single phrase could move the market: 'I have a recommendation.'

The recommendation would travel from one gathering to another, or from a broker to a client, then moved to online forums, then to text messages, then to social media. And many investors did not ask about analysis or financial statements as much as they asked: Should I enter now before I miss the stock?

Over time, recommendations did not disappear.

They just changed their form.

Today, many investors no longer wait for a message from a friend or analyst. Instead, they open ChatGPT or Claude, or use advanced analysis tools linked to platforms like TradingView and MetaTrader, seeking a stock analysis, reading a company's results, or a suggestion for the best entry and exit point.

And for the first time in investment history, the recommendation comes from an algorithm, not a human.

And here, in my belief, the real transformation occurred.

For we are not merely witnessing a development in investment tools, but witnessing a transfer of trust from humans to technology.

To be fair, this transformation carries advantages that are hard to deny. AI can read thousands of pages in minutes, analyze vast amounts of data, link economic news to market movements, and monitor dozens of financial instruments simultaneously. It also does not know the fear that drives some investors to sell at the worst moments, nor the greed that drives them to hold an investment longer than necessary.

And for this reason, major financial institutions around the world have begun investing billions of dollars in AI to improve risk management, analyze markets, and support investment decisions.

But on the other hand, AI does not know your personal circumstances, your financial goals, or your ability to bear losses. It may provide a compelling analysis, but it does not bear the consequence of the decision if it is wrong.

This has prompted regulatory bodies, such as the U.S. Commodity Futures Trading Commission (CFTC), to warn against being deceived by advertisements claiming that trading bots or AI can guarantee profits or accurately predict market movements, stressing that AI cannot predict the future or eliminate the risks inherent in investing.

And it's not just about fraud, but about the development itself. Today, AI tools are no longer content with analyzing data; the world is beginning to move toward what is known as AI Agents, systems that can track markets, read news, analyze data, and even execute some decisions semi-independently. At the same time, regulatory bodies are starting to keep pace with this development. In Saudi Arabia, the Capital Market Authority adopted this year the regulation of Robo-Advisory services, a step that reflects the market's readiness to benefit from modern technologies within a regulatory framework that protects investors and enhances market efficiency.

However, I believe the real question is not: Will the investor use AI? Because the answer is already decided.

Everyone will use it, just as they used the internet, then the smartphone, then apps.

The real question is: Will AI remain an advisor... or will it become the decision-maker?

In my opinion, the danger is not that the machine becomes smarter.

But rather that humans get used to not thinking without it.

AI can gather information, save time, and compare thousands of possibilities, but it cannot bear the outcome of an investment decision made on your behalf.

And for this reason, perhaps the most important question facing the investor in the coming years will not be:

'Which platform do you use?'

Nor: 'Which AI model do you rely on?'

But a much simpler question... after all this development... Is the decision still yours?