The FCA says younger investors are placing substantial trust in AI: 56% of surveyed 18- to 40-year-olds trusted AI tools, while four in five less-experienced investors had used them for investment support. However, the regulator found major misunderstandings around protections: 44% believed AI-generated financial information is regulated, and 32% thought they could receive FSCS or Financial Ombudsman compensation if AI guidance proved wrong.
Although the research concerns investing, the message is directly relevant to mortgage and protection firms. Clients may increasingly arrive having used chatbots to compare fixed and tracker products, estimate affordability or interpret lender criteria. General-purpose AI is not regulated financial advice, and unverified outputs can be incomplete, outdated or unsuitable for an individual’s circumstances.
Action for advisers:
- Explain clearly where online research ends and regulated advice begins.
- Use AI for administration, call summaries, document triage and research support—not unchecked recommendations.
- Implement approved prompts, source-checking, human sign-off, data-security controls and record keeping.
- Ensure consumer communications do not imply that AI tools themselves create regulatory protection.