Yes. ASIC expects AFS licensees and advisers to remain responsible for the quality, appropriateness and compliance of advice when using AI tools such as ChatGPT to assist with drafting Statements of Advice (SOAs). AI can be used for drafting and administrative support, but not as a substitute for adviser judgement, client analysis, supervision or compliance review.
Expanded Answer
ASIC does not prohibit advisers from using generative AI to assist with preparing advice documents. The regulatory position is that the adviser and AFS licensee remain accountable for the final advice provided to clients. Using ChatGPT does not transfer responsibility for compliance with the Corporations Act, best interests obligations, record-keeping requirements or internal compliance standards.
In practice, AI can assist with drafting sections of an SOA, summarising client information, improving readability and generating first drafts of explanations. However, advisers must verify all factual statements, assumptions, calculations, recommendations and disclosures before providing advice to a client. AI-generated content should be treated as draft material rather than final advice.
Key obligations:
- Applies when AI contributes to advice preparation.
- Human review is required before advice is provided to a client.
- Advice must remain appropriate to the client’s objectives, financial situation and needs.
Licensees should also assess privacy, confidentiality, data security and model risk when using AI systems. ASIC’s recent focus on AI governance highlights the need for documented controls, oversight and testing. For additional guidance, see Guide for advisers and licensees: navigating AI in financial services and AI in financial advice: efficiency gains, compliance risks and cognitive costs.
Why it matters
Poor-quality AI outputs can create unsuitable advice, misleading disclosures, privacy breaches and record-keeping failures. Regulatory responsibility remains with the adviser and AFS licensee, which means AI errors can still result in remediation costs, complaints, reportable situations and enforcement action.
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Practical guidance
- Implement a documented AI use policy covering advice preparation activities.
- Review and verify every AI-generated recommendation, statement and disclosure before issue.
- Record how AI was used and retain evidence of human review and approval.
Further reading
Guide for advisers and licensees: navigating AI in financial services
AI in financial advice: efficiency gains, compliance risks and cognitive costs
Avoid the AI trap: how to stay compliant and ahead of the gam