I have spent two decades talking to financial planners about technology and learned one thing which is that the profession is the ultimate chameleon.
We’ve evolved from the manual grind of stock picking to the efficiency of MPS solutions, and from provider led black boxes to transparent, open-architecture platforms.
Throughout this evolution, one thing has remained constant and immovable: financial planning is a human first profession. Whether we are talking about members getting advice on workplace pensions or seeking help with wider retail investments, the true skill isn’t found in a calculator, but in the empathy, the coaching, and broader understanding of their client’s goals.
No sector is immune to the disruption of artificial intelligence, but for the advice community, the revolution is starting where it’s needed most – the back office. We’re currently in the efficiency phase, where artificial intelligence is acting as a digital apprentice, tackling the operational burdens that keep advisers away from clients.
Currently, AI is being deployed in targeted ways to remove specific operational bottlenecks within advice firms. Tools can help capture and distil conversations directly into structured suitability reports and file notes, while others interrogate vast volumes of tax legislation and regulatory guidance to provide near-instant answers to complex questions such as tapered annual allowances or IHT exemptions.
At the same time, AI is strengthening risk controls behind the scenes, enhancing AML and PEP screening to support more robust KYC processes and applying automated compliance oversight to surface higher-risk advice cases before they become regulatory issues.
This phase is internally facing. It doesn’t change the advice, but it builds the competency firms need to handle what’s coming next.
As a technology provider, we see the marketing hype daily. Distinguishing between a wrapper, a simple skin over the likes of ChatGPT, and a truly integrated AI solution is vital.
But for firms looking to select a technology partner it is important to remember you’re not just buying software but outsourcing a portion of your regulatory risk, and the FCA will hold you personally accountable for the output.
To cut through the spin and see the true value of an AI solution it is important to ask yourself a number of questions. First and foremost is whether the sensitive client data is being used to train your model for the benefit of other firms? The answer should be a firm ‘no’. Similarly it’s important to look where this data sits. The ICO views cross border transfers to non-equivalent jurisdictions as a major red flag.
Firms also need to consider the ‘RAG’ strategy. In other words does the AI use ‘Retrieval-Augmented Generation’ to pull only from verified libraries (like the FCA Handbook), or is it imagining answers from the open web.
It is also important to look at algorithmic bias, by testing the model against ‘synthetic personas’, to ensure fair outcomes for vulnerable clients or minority groups. Finally, firms need to consider their exit strategy. If they part ways, how do they retrieve fine-tuned logic and data. It is important to avoid supplier lock-in.
The FCA has been clear that you can delegate a task, but not accountability. Under the Senior Managers and Certification Regime (SM&CR), responsibility for AI failure sits with the SMF24 (chief operations officer) or SMF4 (chief risk officer). To stay compliant, firms must adopt a ‘human-in-the-loop’ philosophy. You cannot blame a ‘hallucination’ for a regulatory breach in a suitability report or a cashflow projection.
Whilst off-the-shelf solutions save time, they don’t yet represent the promised revolution which is why we must look beyond simple automation and towards agentic architecture.
The technical building blocks already exist, however the missing link has always been co-ordination. Historically, creating a single journey required moving vast amounts of data across fragmented systems.
With agentic architecture, AI acts as the connective tissue between these disparate tools. Combined with rising consumer comfort with conversational user interfaces, this makes the automated financial planning assistant a reality. It transforms AI from isolated tools into a proactive partner that co-ordinates a digital journey from start to finish.
