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AI Tasks Advisors Trust — And The Ones They Don’t
Plus, the latest in market news.
Happy Sunday, and welcome to Benzinga’s financial advisor newsletter.
Today we're diving back into Artificial Intelligence. As AI adoption accelerates across the globe, it also is raising some important questions for investment advisors. Read on to see what tasks advisors trust AI with, which ones they don’t, and what could be coming.
Plus, a look at all the top stories and market activity from this past week.
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Table of Contents
INDUSTRY CHATTER
The rise of artificial intelligence continues to accelerate, with relentless demand now deepening the global memory chip shortage. In addition, we now have the Federal Reserve actively tracking AI’s contribution to GDP growth.
And when it comes to the advisory office, AI is there too. What’s less obvious, though, is how far advisors are willing to let it go.
To get a better understanding of this, Advisor360° surveyed 300 U.S.-based financial advisors at RIAs, broker-dealers, and banks. What they found was less about resistance to AI, and more about boundaries — with advisors embracing the benefits while insisting on clear limits.
The survey results showed that 74% of advisors say AI already helps their practice and overwhelming 93% of advisors say retaining control over decisions and advice when using AI tools is non-negotiable.
That balance shows up in how AI is being used today. Advisors are comfortable letting it handle low-risk, time-consuming tasks like meeting summaries (31%), CRM updates (28%), client prep (26%), and routine communications (25%). In other words, AI is being deployed where mistakes are inconvenient, not catastrophic.
Still, trust remains the gating factor. More than half of advisors (55%) cite compliance and regulatory hurdles as the primary reason they don’t use AI more broadly, and 46% say they lack confidence in AI-generated outputs.
What’s notable is how advisors say trust could be earned. Peer-tested tools, compliance approval, and auditable logic matter more than promises of “smarter” AI. This mirrors how new investment strategies gain traction: proof first, marketing later. Advisors aren’t rejecting AI — they’re applying the same due diligence they expect clients to apply to them.
There’s also the interesting client-facing wrinkle. Even as AI becomes more embedded behind the scenes, most advisors aren’t talking about it. Just 21% proactively mention using AI to clients, and nearly 30% avoid the topic altogether.
That likely reflects generational dynamics as younger clients likely assume technology is already doing some of the work, while older clients may worry that AI means less human oversight, not more efficiency.
For now, AI hasn’t earned a seat at the decision-making table, but it’s quietly improving efficiency while advisors decide when, and if, it’s ready for a bigger role.
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WEEKLY MARKET RECAP
It was a mixed week on Wall Street, with large-cap indexes largely rangebound while the rally broadened to small-cap stocks. The Russell 2000 index not only hit fresh record highs but also posted its longest streak of consecutive outperformance versus the S&P 500 since 2008.
Small-Cap Strength Meets Economic Reacceleration
The foundation of this outperformance was better-than-expected macroeconomic data.
The U.S. economy is now projected to grow at a stunning 5.3% annualized rate in the final quarter of 2025, according to the Atlanta Fed's GDPNow model. Initial jobless claims came in at 198,000 last week — below expectations and the second-lowest level in two years — pushing back fears of a cooling labor market.
Analysts see the surprising reacceleration of the U.S. economy as fresh fuel for small- and mid-cap earnings, prompting upward revisions to profit estimates.
Earnings season got off to a strong start for some of Wall Street's biggest banks, with Goldman Sachs and Morgan Stanley standing out after delivering trading revenues well above expectations.
Policy Shocks: Interest Rate Caps and the Powell Probe
However, the financial sector reacted negatively to President Donald Trump's plan to cap credit-card interest rates at 10%. Major payment providers such as Visa (V) and Mastercard (MA) suffered their worst week since the April 2025 tariff shock, with shares falling more than 5%.
On the political front, the most significant development of the week was undoubtedly the launch of a criminal investigation by the Department of Justice into Federal Reserve Chair Jerome Powell.
The allegations — related to testimony before Congress on spending and renovations of Fed buildings — were rejected by Powell as a direct attack on the central bank's independence, raising deep concerns across financial markets and among international policymakers.
The Tariff Defense and Detroit's Manufacturing Boom
Trump also addressed the Detroit Economic Club on Tuesday, defending tariffs as a tool that he said has revitalized Michigan's manufacturing economy, particularly in the automotive sector.
Ford (F), he said, had returned to round-the-clock production at its Michigan complex and announced billions of dollars in new investment across Midwestern plants. He also highlighted General Motors (GM) plans to shift production of the Chevrolet Blazer and Equinox from Mexico back to the U.S.
Ahead of a Supreme Court ruling on the legality of the tariffs, Trump said the case is being driven by what he described as "foreign-centric" and "China-centric" interests, adding that he could pursue alternative paths if necessary.
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THE WEEK AHEAD
Economic Data
Monday: Holiday (Martin Luther King Day)
Tuesday: API weekly crude oil stock
Wednesday: Pending home sales, construction spending, IEA
Thursday: Initial jobless claims, PCE, GDP, crude oil inventories
Friday: Consumer sentiment, S&P Flash services/manufacturing
Earnings
Monday: Holiday (Martin Luther King Day)
Tuesday: Netflix (NFLX), 3M (MMM), U.S. Bancorp (USB), United Airlines (UAL), D.R. Horton (DHI), Fastenal (FAST)
Wednesday: Johnson & Johnson (JNJ), Charles Schwab (SCHW), Halliburton (HAL), Kinder Morgan (KMI)
Thursday: Procter & Gamble (PG), GE Aerospace (GE), Intel (INTC) Intuitive Surgical (ISRG), Capital One (COF)
Click here for the full calendar of economic data and earnings reports.
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