AFS licensees and authorised advisers remain responsible for AI-generated advice. ASIC expects accountability to remain with the person and licensee providing the financial service, even when AI tools contribute to research, drafting, analysis or recommendations. Responsibility does not transfer to the AI provider, software vendor or technology platform.
Expanded Answer
ASIC’s regulatory position is that existing financial services obligations continue to apply when AI is used. If AI contributes to the preparation, formulation or delivery of advice, the adviser and AFS licensee remain accountable for ensuring the advice complies with the Corporations Act, is appropriate for the client and satisfies applicable compliance obligations.
This means advisers cannot rely on AI outputs without review. AI-generated recommendations, explanations, assumptions and disclosures require verification before being provided to clients. The adviser remains responsible for understanding the advice, assessing client circumstances and exercising professional judgement. AFS licensees remain responsible for supervision, governance, risk management and compliance monitoring.
Key obligations:
- Human accountability remains with the adviser and AFS licensee.
- AI outputs must be reviewed before client use.
- Compliance obligations apply regardless of whether content is human-generated or AI-generated.
Regulatory scrutiny increases where AI influences client outcomes, advice quality, disclosure accuracy or decision-making processes. Effective governance frameworks should clearly allocate responsibility, document oversight and establish controls over AI use. For additional guidance, see Guide for advisers and licensees: navigating AI in financial services and The hidden risks of AI: ASIC’s review of licensees’ embrace of artificial intelligence.
Why it matters
Many AI risks arise when organisations assume responsibility shifts to technology providers. Regulatory accountability remains with the adviser and licensee. Failure to supervise AI-generated content can lead to unsuitable advice, client harm, remediation obligations, reportable situations and enforcement action.
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Practical guidance
- Assign clear ownership for all AI-assisted advice activities within the business.
- Require documented human review before any AI-generated content reaches clients.
- Maintain governance records showing oversight, testing and approval of AI use cases.
Further reading
Guide for advisers and licensees: navigating AI in financial services
The hidden risks of AI: ASIC’s review of licensees’ embrace of artificial intelligence