Three Ethics Challenges Advisers Will Confront in the Next Era of AI

Artificial intelligence (AI) in financial services is entering a new era of ethics by design. Workflows, products, and service offerings increasingly bring automation and ease, while regulatory guidance remains technology-agnostic, affirming the centrality of client best interest and fiduciary practices irrespective of which tools are integrated into the business.

Financial professionals must navigate profound design factors while simultaneously confronting emerging gray areas in practice. The imminent issues concern systems where (1) better AI performance demands more personal data than clients realize they are sharing; (2) the capabilities that make AI systems powerful also obscure conflicts of interest; and (3) sophisticated algorithms quietly erode professional judgment while generating an illusion of certainty.

When it comes to trust in financial services, clients indicate that keeping their data safe and secure is their number-one expectation, according to research published by The American College Maguire Center for Ethics in Financial Services.¹ Yet meeting minimum client expectations is the starting point for managing AI, not the finish line; considerations of AI ethics can’t begin and end with data security and client confidentiality.

The next phase of integration is a pressure test for whether AI systems will elevate the financial profession toward client best interest or undermine hard-earned trust. The ethical questions won’t be resolved in compliance checklists or data security protocols. Thinking outside the box with respect to ethical duties has never been more important; your clients depend on it!

Read the full article to explore the ethical challenges advisers will face as AI reshapes financial services.

More on AI Ethics

• Explore the Center’s Responsible AI program to learn more about how it is helping the industry navigate this complex space, including our quarterly Responsible AI Executive Forums.  
• Discover more key insights on AI ethics through the Center’s recent publications on our website, the NAIC Journal, the Journal on AI Policy and Complex Systems, and the Journal of Financial Planning.