CFP Board Offers Guidance on the Responsible Use of AI Within Financial Services

The CFP Board, a professional body for personal financial planners in the United States, has published a guide to assist financial planners in the responsible use of generative AI in their professional services.

Generative AI Ethics Guide: A Checklist for Upholding the Code and Standards is a comprehensive resource, according to the CFP Board, for CFP professionals in using Gen AI and part of an ongoing series of tools offered.

“When wielded with care and responsibility, AI has the power to amplify expertise, unlock efficiencies, and enhance the value financial advisers bring to their clients,” said Kevin R. Keller, CAE, chief executive officer of the CFP Board. “The Generative AI Ethics Guide helps CFP professionals integrate AI into their practices while staying true to CFP Board’s code of ethics and standards of conduct.”

When used effectively, Gen AI can boost efficiency and enable advisers to focus on areas of their business that AI can’t replicate, such as strengthening relationships and providing personalized value to clients, said the CFB Board. The Generative AI Ethics Guide outlines ways that professionals can address privacy concerns, data integrity and potential biases.

The included checklist is a tool and reminder to help safeguard confidentiality, verify the accuracy of AI-generated output, and maintain compliance with privacy laws. It also highlights the need to confirm that the use of AI does not jeopardize professional integrity or lead to conflicts of interest.

The guide emphasizes that AI can assist with tasks like research and content refinement but cannot replace the expertise, judgment, and care of trained human beings. A related survey that the CFP Board did in July 2023 supported this insight, noting that “investors demonstrate more confidence in AI-generated advice after verifying that advice with a financial planner.”

• Sixty-two% of investors 45 and older saying they were “very satisfied” with the experience of receiving financial planning advice from a Gen AI tool, versus 38% of investors younger than age 45.
• Only about 1 in 10 investors younger than 45 (8%) said they would be very comfortable implementing advice solely from a generative AI tool, while 15% of older investors concurred.
• When AI-generated recommendations are verified by a financial planner, the percentage of investors describing themselves as “very comfortable” nearly doubles to 21% (up from 12%) and the percentage of those saying they would be “very or somewhat comfortable” jumps to 52% (up from 31%).

Another report from Investment data management solutions firm Dasseti noted that 89% of general partners had utilized Gen AI tools in their workflow over the past year, and 84% plan to continue using Gen AI in the next 12 months.

This year, the CFP Board said it would form and external AI working group, bringing together financial and technology leaders to help shape future initiatives and programs. This group will explore how AI is transforming financial planning and what it means for firms, advisers, clients, and stakeholders across the financial advice landscape. The Working Group will assess AI’s impact, develop future scenarios and provide “actionable recommendations.”

Last fall, a guest contributor to Alts Wire discussed the opportunities and risks associated with using Gen AI in in the financial services sector. To harness AI systems safely, Zach Adams, co-founder of XFinLabs, provided background on the differences between public and private AI implementations and how to leverage Gen AI while practicing compliance.

Click here to visit Alts Wire directory page.