Trust, compliance and oversight remain key concerns
The proportion of advice firms using artificial intelligence (AI) has more than doubled in just a year, rising from 29% to 60%, according to the latest State of the Advice Nation report from consultancy the lang cat.
Usage is even more widespread among larger businesses. Among firms with more than £1 billion of assets under management, 88% reported using AI tools in some form.
The study suggests that AI is now embedded in day‑to‑day operations rather than confined to experimentation. Firms most commonly deploy the technology to support back‑office functions such as administration, meeting notes, data processing and drafting documentation.
When asked which technology had made the biggest difference to their business over the past 12 months, 24% identified AI, compared with 26% who highlighted cashflow modelling.
“What is clear is there is an appetite and an application for its use within advice firms, with usage doubling from last year. “Firms are finding it useful for administration, meeting notes, data handling and report drafting,” said Steve Nelson, insight director at the lang cat.
Despite this rapid take‑up, advisers remain cautious about allowing AI to influence client‑facing recommendations. Concerns around reliability and regulatory risk appear to be key barriers on further adoption.
Almost half of respondents (46%) cited trust in AI‑generated outcomes as their main worry, while 40% pointed to compliance and regulatory issues.
These reservations come through strongly in advisers’ comfort levels with AI playing a direct role in advice delivery. Asked to rate how comfortable they were with AI‑generated recommendations in client‑facing advice on a scale of one to 10, the average response was 4.1.
Views varied by firm size. Businesses with less than £50 million in assets under management reported an average comfort score of 3.5. Firms with between £250 million and £500 million in assets under management were more open to the technology, scoring 6.5 on average.
“There is still a reticence about using it for client-facing tasks or for anything that’d lessen the involvement of human judgement,” Nelson said. “Where we are seeing nervousness around adoption, despite AI being available, affordable and increasingly capable, is in a lack of regulatory frameworks to ease advisers’ minds where there are understandable concerns around regulation and compliance.
“Firms lack shared norms around acceptable use, and if there was more direction in this area, this may lead to greater levels of comfort in adoption.”
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