Nobody Licensed AI to Give Financial Advice
Nobody Licensed AI to Give Financial Advice
Publish Date: 2026-07-08 13:44:00
Source Domain: www.pymnts.com
Financial regulation was built around a specific relationship: a licensed adviser who owes the client a duty of care, carries professional indemnity insurance and answers to a regulator if something goes wrong. General-purpose artificial intelligence (AI) models carry none of those obligations. They are not authorized to give financial advice.
PYMNTS Intelligence found that 62% of Gen Z consumers in the U.S. are open to using AI for “what if” financial planning scenarios. PYMNTS Intelligence also found that 39% of U.S. consumers have already used AI for at least one payment-related activity in the last three months.
The U.K.’s Financial Conduct Authority’s Mills Review found that more than a quarter of U.K. consumers trust ChatGPT, Claude or Gemini for financial advice, with limited awareness that the consumer protections covering licensed advisers do not extend to them.
The scale of the gap is specific. Lloyds Banking Group’s Consumer Digital Index found that 56% of U.K. adults, roughly 28 million people, used AI for financial questions over the preceding 12 months, IT Pro reported.
AI Has No Fiduciary Duty and No Obligation to Get It Right
That gap in accountability has real consequences. According to a PYMNTS report, an MIT expert identified the absence of fiduciary duty as a significant structural limitation: the model optimizes for a plausible answer, not the client’s financial outcome. When a licensed adviser gives bad advice, the client has a formal route to redress. When an AI model gives bad advice, the client has the advice.
The Guardian reported that ChatGPT and Microsoft’s Copilot told users they could invest 25,000 pounds ($33,403) in an ISA. The actual limit is 20,000 pounds ($26,724), and following that advice would breach HMRC rules. ChatGPT also incorrectly told users that travel insurance was mandatory for most EU trips, The Guardian said.
The FCA’s executive director Sheldon Mills, who authored the Mills Review, noted that…
