ANALYSIS: What Advisors Should Tell Clients Who Use AI For Guidance?

Tom Burroughes

26 May 2026

(An earlier version of this analysis appeared on Family Wealth Report, sister news service to this one. The implications of these issues are global, so we hope readers across the financial jurisdictions of the world find these comments useful.)

AI resembles a “five-year-old genius” that can cut through information and come up with answers faster than the sharpest student. A question, however, is how far HNW individuals use it to plan their finances.

As of today, while the technology has grown rapidly, it appears that while AI can assist with basic tasks, it does not yet have the personal touch or the accountability and regulatory oversight that a financial advisor should have.

Surfing the internet, your correspondent found examples of YouTube videos about topics such as “Asking ChatGPT for financial advice,” “Get Out of Debt Using ChatGPT,” and "How To Use ChatGPT-5 to Build INSANE Financial Models.” A Reddit page has the headline: “I use copilot as a financial advisor, is that a good idea or should I make an appointment with a real one (that is if I can afford it)?”

It’s clear that this is a trend. But one of the issues that came to the surface following the 2008 financial crisis was that advisors needed to be more mindful of their fiduciary responsibility to clients. If that is important, where does AI fit in, given that it may have biases acquired from from underlying data?

The soft power of seduction
As use cases have proliferated, one concern that has arisen is not that AI puts humanity under tech overlords, but something softer and more insidious. The University of Tennessee law professor and writer, Glenn Reynolds, has caught the mood with a new book, Seductive AI. As the online description of his short book says, “It family offices apply to custodians and trust companies belongs on AI vendors," he added.

A growing force
The financial planning sector certainly appears to see AI as a major force.

In an article from the May 2025 edition of the Journal of Financial Planning, the author, Emma Foulkes, wrote: “From a consumer’s perspective, we see increasing numbers relying on AI to take material decisions on their behalf, mediate their interactions with financial markets, and finally automate their financial lives.

“Right now, AI is mostly used as an assistive tool to explain concepts and options. Others already use them as advisory systems that recommend actions.

“When implemented well, AI can enable firms to innovate at pace and better meet customer needs. It can enhance good outcomes by improving personalisation, improve customer understanding and support and driving better quality services at lower cost. Agentic AI in particular could support people to automatically optimise their household finances, reducing inertia through automatic switching and potentially encouraging a saving and retail investment culture, which could help us respond to demographic changes in the UK.”

Foulkes warned that AI can amplify risks, such as embedded biases, discrimination, exclusion, opaque decision-making (particularly when multiple AI models interact), misleading or hallucinatory advice and eroding consumer trust. “It could also introduce new risks if decisions are increasingly delegated to AI agents, including reduced consumer agency, reduced consumer understanding, unconscious manipulation and further decrease financial literacy,” she wrote.

Back in 2013 in the UK, new advisor regulations called the Retail Distribution Review forced some sales-based IFAs out of business, creating what some feared would be an advice gap. Into that “gap” moved digitally-driven wealth platforms, or “robo-advisors,” with the likes of Nutmeg, as it was called then, being the most well known. (The Nutmeg brand disappeared as the firm was eventually absorbed into JP Morgan.) A number of other “robos” took flight, for example in the US with Wealthfront and Betterment. While “robo-advisor” isn’t much used as a term these days, it is arguable that AI represents a new stage of it.