AI & Compliance: Where Financial Advisors Should Draw the Line

AI is reshaping how financial advisors operate—streamlining tasks, enhancing communication, and offering on-demand support like never before. But as the tools grow more powerful, so does the risk of using them the wrong way.

At My Advisor Group, we believe AI is here to stay. But to truly serve clients and protect your practice, advisors must adopt AI within a clear ethical and compliance framework.

What Makes AI Risky for Advisors?

AI tools like ChatGPT, Claude, or Google Gemini work by processing the data you provide. The more context you give, the better the output—but that’s exactly where compliance concerns arise.

Here’s what advisors must avoid:

Don’t:

• Upload real client names, SINs, or account numbers into public AI tools

• Use AI-generated content without reviewing it for accuracy and suitability

• Allow AI to make recommendations or decisions without professional oversight

• Store sensitive data in AI platforms that aren't secure or compliant

  
  

What’s Safe—and Smart—to Do With AI

When used properly, AI can support compliance, improve consistency, and save you time. The key is to treat AI like an assistant, not an authority.

Do:

• Use anonymized or hypothetical data when prompting

• Draft internal memos, procedures, or training guides for compliance purposes

• Translate compliance documents into plain language (for internal clarity)

• Create outlines for KYC updates, client follow-up templates, or risk disclosures

• Review all outputs thoroughly and route through compliance if client-facing

  
  

Real Example: Bad vs Good Prompting

Bad Prompt

“Write a reply to this client email: John Smith’s RRSP statement is missing; see attached file for account details.”

Better Prompt

“Draft a professional client response regarding a missing RRSP statement. Keep it polite, reference record delays, and request client confirmation.”

Notice how the second version protects privacy and still delivers a helpful result.

A Compliance Checklist for Advisors Using AI

1. Before submitting any prompt to AI, ask yourself:

2. Am I including any personally identifiable information (PII)?

3. Is this going to a private, secure AI tool or a public platform?

4. Will this output be used internally or sent to a client?

5. Have I reviewed the output through a compliance lens?

6. Do I have a disclaimer in place if needed?

7. If in doubt—keep it internal, anonymized, and reviewed.

💬 Join the Discussion: How Are You Navigating AI and Compliance?

Inside the AI for Advisors Forum on My Advisor Group, we’re diving deep into:

• What advisors are using AI for (safely!)

• How to talk to compliance about AI workflows

• Examples of prompts that pass compliance review

• Best tools for private, secure AI usage

🔗 Join us today at www.myadvisorgroup.ca

Your insights and experiences can help shape the future of ethical, compliant AI use in our industry.

Final Thought:

AI is powerful—but your professional judgment, ethical lens, and compliance oversight remain irreplaceable.

Let’s build better practices—together.