Five takeaways for wealth managers from AI in Compliance

What happened?

TCC recently hosted the ‘AI to supercharge your ongoing advice’ conference at the Bloomsbury in London, sparking vital discussions on advice, compliance, and technology. The event focused on the real-world operational challenges wealth managers face when maintaining compliance in ongoing service delivery.

We have compiled these discussions into an extensive, practical Q&A document covering more than thirty of the most pressing questions raised by attendees on the day.

Why does it matter?

Firms are facing increased pressure under Consumer Duty to justify and document their ongoing advice services, particularly in complex scenarios like ‘free’ advice where no fees are charged. AI offers powerful tools to streamline these processes, but leaders must navigate the distinct roles of generative and predictive technologies.

While generative AI assists with drafting and content, predictive AI excels at identifying risk, spotting file gaps, and strengthening quality assurance. Utilizing these tools requires absolute transparency with clients regarding data handling and ethical AI boundaries.

Who is affected?

This update and the accompanying Q&A guide are essential reading for wealth management professionals, compliance reviewers, and advisory business leaders.

Key risks

• Undocumented Ongoing Advice: Failing to record ‘reasonable steps’ and client contact, leading to compliance vulnerability.
• Unmanaged ‘Free’ Advice: Providing advice without clear fee structures or documented value, breaching Consumer Duty standards.
• Unethical Data Exposure: Introducing AI solutions without transparent customer communications regarding how personal data is processed.

Actions to take

1. Download the Q&A Guide: Access the comprehensive Q&A follow-up to review practical advice and compliance strategies from industry peers.
2. Differentiate AI Tools: Align AI initiatives to use predictive models for risk-spotting and generative models for administrative drafting.
3. Clarify Client Terms: Update customer-facing terms of business to explain clearly and ethically how AI and customer data are integrated.
4. Run Pilot Programs: Address team change resistance by initiating small-scale pilot programs with clear, measurable early wins.

Wider implications

Compliance is rapidly evolving into a technology-driven function. Firms that integrate AI responsibly and maintain human oversight will achieve a significant competitive and operational advantage.

Recommendations

Review the comprehensive Q&A recap with your compliance and advisory teams to guide your technology and training roadmaps for the upcoming year.