AI Financial Advice You Can Trust

In a new paper published in the Journal of Financial Regulation and Compliance, Managing Director Azish Filabi, JD, MA, together with co-authors and scholars in residence at the Cary M. Maguire Center for Ethics in Financial Services Sophia Duffy, JD, CPA, AEP®, and Steve Parrish, JD, RICP®, CLU®, ChFC®, AEP®, examine how artificial intelligence-enabled investor tools may introduce conflicts of interest that fall outside existing definitions of advice and recommendations.

The authors introduce the concept of “steering” to describe how modern technologies can subtly nudge investor behavior while operating in the background through interface design that prioritizes information based on user engagement. In this context, “steering” may influence financial decisions even when it falls below the regulatory threshold of a formal recommendation.

To help address these gaps, the authors propose a taxonomy that categorizes investor-facing technologies based on how they interact with investors and influence decision-making, highlighting the need for regulatory approaches that more effectively account for how AI-enabled tools may shape investor behavior.  

For additional insights on AI-enabled investor tools and conflicts of interest, read the full paper now.

More on the Center for Ethics and Responsible AI  

• Explore the Center’s Responsible AI program to learn more about how it is helping the industry navigate this complex space, including our series of quarterly Responsible Executive Forums.  
• Learn more about becoming a corporate supporter of the Center’s Alliance for Ethics in Financial Services to unlock exclusive invites to the Responsible AI Executive Forums and gain first access to original research.
• Explore additional key insights on AI in financial services from Center publications, including AI Ethics and Life Insurance: Balancing Innovation with Access, and Five Key Questions for Ensuring Responsible AI in Financial Services.