AI is changing how financial advisors work. Regulators are paying attention.
AI is changing how financial advisors work. Regulators are paying attention.
AI has swept up the world of financial advising, albeit with a slow start. A found that, among the professions surveyed, financial advisors were the lowest in AI adoption both at work and at home. Three years later, new data from the shows that at least 70% of advisors in its sample now use AI for notetaking. That sweeping change is a result of a number of factors, ranging from the pressure to do more with less to vast improvements in AI tooling. But with adoption at scale comes a new question: Are these tools actually appropriate for such a highly regulated industry?
Consumer sentiment around AI ranges from skepticism to a full embrace. The skeptics have a point: Clients worry about data privacy, and the use of shoddy AI tools can result in client data being exposed to bad actors. In fact, if their advisor used AI without telling them.
Advisors using purpose-built AI tools, however, are not only assuaging clients鈥 concerns but also outperforming in client experience metrics. 鈥檚 shows that certain AI tools (usage of which, as a default, is disclosed to clients) point to higher client sentiment when advisors use AI in meetings to take notes, build premeeting briefs, and capture post-meeting tasks. The result is an advisor who is more present in meetings, who can surface previously hidden insights, and who creates more efficient workflows in their firms.
The (FINRA) released its 2026 report with . While their core position is technologically neutral, the existing rules around supervision, books and records, communications, and fair dealing apply equally when AI is involved. The report outlines three specific areas of focus: Vendor due diligence, AI communications and retention, and AI agent governance. Put simply, these aren鈥檛 actually new regulations, but the same industry regulations that applied to CRMs and digital communications.
The FINRA regulations directly address the challenge of advisors using 鈥渟hadow AI鈥: general-purpose consumer tools, such as Claude or ChatGPT, used without firm approval, where there is a risk for actual exposure. This might look like uploading a meeting transcript to a large language model (LLM) or downloading a free notetaking tool. These tools weren鈥檛 built for regulated environments because they don鈥檛 factor in data governance, retention policies, human oversight layers, or contractual protections.
By contrast, the platforms built specifically for financial advisors are designed exactly around the requirements FINRA outlines, which means firms that select purpose-built have compliance built into their DNA. The record rate of adoption of these industry-specific tools is a testament to how these tools improve the advisor and client experiences, rather than putting them at risk.
Both the question around compliance and client experience point in the same direction: tools purpose-built for this industry, with governance built in, are the ones that hold up. Advisors don鈥檛 have to choose between being productive and being compliant. Industry-specific tools ensure advisors can do both.
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