Skip to main content
Why AI should support, not replace, financial advice
Technology, and in particular Artificial Intelligence (AI), has rapidly changed the way we live and manage our finances in recent years. As a business, we are seeing more people arrive having already used AI either to search for and find us or to formulate their financial plan before talking it through with one of our financial advisers.
Arrange your free initial consultation
Our experience, so far, has been positive, as it has given us the opportunity to talk through all the questions asked and, in many cases, put questions back that haven’t been considered. This has given prospective clients the reassurance of knowing that the final recommendations have been reviewed by a qualified professional who is an expert in the field of financial advice. The adviser will take the time to understand their individual circumstances and most Importantly, as a regulated firm, any advice they then go on to take is protected. AI financial advice is currently unregulated and offers no redress or protection to consumers.
Understanding how best to use AI for financial advice is vital
AI can help you prepare for conversations, reinforce your understanding and ask better questions. Used badly, it can give you misplaced confidence in an answer that may be outdated or simply wrong, a common issue with AI where they ‘hallucinate’, confidently providing incorrect information and presenting it as fact.
That distinction matters because more people are now using AI to help with financial decisions. The industry regulator, the FCA, recently did a review and found that around one in five UK adults are open to AI making financial decisions for them, while Government analysis of the same review said around 26% of people trust general purpose tools such as ChatGPT, Claude or Gemini for financial advice, despite limited awareness that formal routes to redress and compensation may not apply.
It is easy to see why AI is attractive. You can ask a question at any time, in plain English, and receive an instant answer. If you want to understand financial terms and concepts, AI can often explain the basics in a way that feels more approachable than searching through technical guidance.
For example, someone might use AI to prepare for a meeting with a financial adviser. In that sense, AI can play a helpful role. It can make you feel better informed before you sit down to make important decisions.
The challenge is that financial planning is rarely just about one question. The right answer often depends on personal context such as your income and tax position, and even things you wouldn’t always think to add like attitude to risk and future financial and life goals. If any of that context is missing, the answer can quickly become unsuitable.
That is especially important if your affairs are more complex or just bigger in monetary terms. A high earner asking about pension contributions may also need to think about annual allowance rules, tapered allowance, salary sacrifice, tax relief, cashflow, protection and inheritance tax. A simple AI answer might explain one part of the picture but miss the wider planning point.
The risk of relying on AI alone
The main risk of AI is that it can be wrong, and due to the confidence with which it will present each answer, you can never be sure when it’s accurate or wide of the mark.
Recent research from Saturn, reported by Financial Reporter and InvestmentNews, found that major AI models gave incorrect or incomplete answers to financial questions in 57% of cases. On harder questions, the error rate reportedly rose to 88% on average. The questions covered areas including pensions, mortgages, inheritance tax, retirement planning and debt management.
Those are not minor topics. A wrong answer on a pension transfer for example could have lasting financial consequences. It could mean losing guarantees or safeguarded benefits, making a decision that cannot easily be reversed or one that results in a significant tax bill.
Financial rules change regularly, and some models may rely on outdated information unless they are connected to current sources and prompted carefully. Even then, you still need to know whether the source is reliable and whether the answer applies to your personal circumstances.
This is where the difference between information and advice becomes important. AI can provide general information like definitions and explaining basic concepts. What it cannot reliably do is take responsibility for a personal recommendation that is suitable for you and your unique circumstances.
What is the Financial Conduct Authority (FCA) doing about AI and financial advice?
The FCA is looking closely at how AI could reshape retail financial services. Its Mills Review, published in July 2026, considered how AI may affect consumers, firms and markets. It recognised the potential for AI to reduce friction and help address the advice gap, but also raised questions about suitability and consumer protection.
The Government has also confirmed that the FCA is considering the impact of financial guidance and advice like outputs produced by general purpose large language models. This matters because many AI tools currently sit outside the traditional advice framework, even if the answer they provide looks and feels like advice.
The FCA says you are unlikely to have access to the Financial Ombudsman Service or Financial Services Compensation Scheme if you use a firm that is not authorised. By contrast, regulated financial services bring formal complaint routes, and FSCS may provide compensation in some circumstances if a regulated firm fails and eligible advice was unsuitable.
That protection is a key part of the advice process. It means there is accountability behind the recommendation.
Working with an adviser in an AI world
AI is a tool, and like any tool, its value depends on how you use it. Importantly here the emphasis is on you. It’s only as good as the questions you ask it to answer.
What we sometimes find when clients come to us, having used AI to prepare questions for their financial adviser, is the prospective clients don’t always fully understand what they are asking. This can create a false impression that they are already familiar with certain financial concepts. It’s better to know what has been done using AI so that we spend the right amount of time fully explaining certain terms or financial concepts, as we normally would, during an initial conversation.
When used carefully, AI can help you become a more informed client. It can help you understand the language of financial planning, gather the right personal information to come to the initial meeting with and take a more active role in decisions. It can also help you challenge assumptions and ask clearer questions.
But regulated advice still matters. A financial adviser can look at your full financial picture, understand your priorities, explain the trade-offs and provide a personal recommendation that is specifically tailored to your best interests. An adviser is also working within a regulated framework that is designed to protect you.
How AI can support you before speaking to an adviser
AI can be useful before you speak to an adviser because it can help you organise your thinking. You might ask it to explain the difference between an ISA and a pension, summarise the main questions to consider before entering into retirement planning conversations, or help you list the information an adviser may need in order to come to the meeting prepared.
This means you can arrive with a clearer sense of what matters to you, letting your adviser spend more time on the areas where professional judgement adds most value.
The important point is that AI should help you prepare for advice rather than being a substitute for the advice itself.
How AI can support you during your adviser meeting
AI can support you in the advice process, allowing you to check your understanding of the recommendation and advice to give you added confidence throughout, but it should not be the whole advice. The best outcome is found by using AI to become better informed, while relying on regulated advice when decisions are personal, complex or otherwise financially significant.
If you’ve used AI for financial advice and would like to see how our advice compares, why not give us a call for an initial conversation to see how we can help.
Arrange your free initial consultation
This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.
The Financial Conduct Authority (FCA) does not regulate estate planning or tax advice.
