As the FCA clamps down on rogue finfluencers, a bigger threat may be slipping under the radar: AI chatbots dispensing unregulated financial and tax guidance at scale. In this opinion piece for IFA Magazine, Sabby Gill, CEO of Dext, argues that while AI can enhance adviser efficiency, unchecked reliance on generalist tools risks misinformation, non-compliance and costly client mistakes, making human oversight more valuable than ever.
The FCA’s recent ‘week of action’ sent a clear warning shot to influencers publishing unauthorised financial promotions on social media, flagging 1,267 illegal adverts. With these platforms quickly becoming a go-to source for financial and tax guidance, millions of people are putting themselves at risk of falling into costly tax traps – and this was a long-overdue crackdown on a very visible problem.
However, the FCA is missing the most powerful, unregulated voice in the room – public, generalist AI tools like Claude, ChatGPT and Gemini. While enforcement teams focus on human content creators, algorithmic advisors are scaling globally without compliance checks. They are attracting audiences that eclipse social media platforms with the promise of instant, free advice.
But sounding authoritative and being accurate are two completely different things. And when it comes to money, that gap has serious consequences.
Our research at Dext shows that these dangers are now very real. Half of UK accountants and bookkeepers say businesses have already lost money after following incorrect AI-generated advice, while a third believe over-reliance on these tools could contribute to business failure within the next year.
This is a mammoth issue. Your clients aren’t just scrolling through social media for stock tips – they are using AI to dictate their tax structures and wealth strategies. The main risk is no longer a rogue human on social media, but a persuasive, unmonitored machine.
The illusion of accuracy
The appeal of generalist AI tools makes perfect sense. They’re fast, free and persuasive. They don’t just provide raw data, but instead generate affirmative answers that give the illusion of absolute certainty. When a client wants an instant answer on inheritance tax or capital gains, the temptation to just ask a chatbot is huge.
Consider a scenario most financial professionals will increasingly recognise. A client arrives at a review meeting having already restructured part of their finances based on confident chatbot guidance, entirely unaware they’ve acted on a hallucinated interpretation of last year’s tax rules.
But herein lies the trap. These tools are quietly guiding decisions behind closed doors, but they don’t flag uncertainty, they don’t cross-reference real-time shifts in regulation. They just predict the most plausible answer based on historical data. In a sector with zero margin for error, a confident but hallucinated mistake from a chatbot is a direct route to non-compliance and penalties.
The accountability gap
This is why the financial services sector needs to draw a firm line. Financial planning isn’t about probability or pattern-matching, it’s an industry built on years of context and an understanding of regulation. Professionals in the sector are absolutely essential in bringing this knowledge and applying it to the task at hand.
AI has no concept of accountability. A chatbot can’t sign off on a financial document. It can’t stand up in front of the FCA when a strategy falls through, it cannot hold Professional Indemnity insurance, and it doesn’t answer to individual liability under the Senior Managers and Certification Regime. If clients are expecting to point the finger at an AI chatbot and be absolved of all blame when things go wrong, they’re in for a big reality check.
Human oversight is non-negotiable in this industry. At the end of the day, AI cannot be the final point of approval. It lacks professional judgement. Human experts are vital for this professional oversight, providing a filter to align with the complex realities of finance.
What does good regulation look like?
Finance professionals are eager for change, with 90% of accountants and bookkeepers already calling for regulation of AI. But if the regulator wants to make meaningful progress in protecting consumers, its enforcement strategy must evolve at the same pace as technology. Traditional ‘weeks of action’ and takedown requests serve their purpose, of course, but they are ineffective against software that generates millions of financial prompts every day. We can’t just react once the financial harm has already happened. We need to treat the cause, not the symptom.
Good regulation requires forward-looking, principles-based frameworks that place the onus directly on the tech and social media giants providing access to these tools. Platforms must take ownership of the risk, embedding financial guardrails and displaying clear disclaimers on advice. But importantly, they need to prevent public models from delivering unverified, unregulated advice under the guise of an assistant.
Human advice as the premium
Ultimately, the rise of these ‘algorithmic finfluencers’ doesn’t threaten the future of financial advisors – it reinforces their value.
Unlocking the power of AI isn’t about replacing the human element, but supercharging it. This is where specialised, domain-specific AI tools that operate within strict regulatory guardrails are transforming the back office. Rather than acting as conversational chatbots, these tools are focused entirely on automation, capturing and extracting financial documents with near-perfect accuracy.
For advisors, this automation is a game changer. Tax forecasting and investment strategies are only ever as good as the data informing them. By using specialised AI to handle the heavy lift of data collection, professionals can eliminate human data entry errors and maintain a strong, real-time financial foundation. Importantly, it gives back time to professionals, which is a critical currency. By automating repetitive admin, advisors can focus on high-value services like client strategy and relationship building – which an AI tool can never truly replicate.
The clients that successfully grow and protect their wealth in the next few years won’t be those who found a speedy chatbot shortcut, but those who recognise that real financial security requires a solid tech foundation, accurate data, and the accountable judgement of a financial advisor.
