The FCA says younger investors are increasingly turning to AI: 56% of 18- to 40-year-old investors or prospective investors surveyed said they trust AI tools. However, 44% incorrectly believed AI-generated financial information is regulated, while 32% thought they could receive Financial Services Compensation Scheme or Financial Ombudsman Service protection if AI-led guidance went wrong.
Although the research concerns investing, the implications for mortgage and protection advisers are clear. Clients may arrive with AI-generated product comparisons, affordability assumptions or rate forecasts and may overestimate their reliability or regulatory status. General-purpose chatbots are not regulated; tools specifically configured to provide financial advice are more likely to fall within the FCA’s perimeter.
Adviser response: acknowledge AI as a useful research aid, then distinguish education from regulated advice. Build a documented process for checking client-supplied AI information, correcting inaccuracies and explaining why individual circumstances, lender criteria and full fact-finding remain essential.