AI, Ethics, and the Advice Line
How Total Wealth Planners Stay on the Right Side of Both FCA and CMA Regulation
Using AI as a client-empowerment tool — without drifting into regulated advice or consumer law risk
Artificial intelligence is fast becoming one of the most powerful tools in the Total Wealth Planner’s toolkit. Used well, it deepens client understanding, sharpens decision-making, and radically enhances self-agency.
Used carelessly, it can blur regulatory boundaries and expose practitioners to both:
- FCA perimeter risk (FSMA-regulated advice)
- CMA / consumer law risk (misrepresentation, negligence, unfair trading)
A recent practitioner question captured this perfectly:
If a client uses AI to assess whether an ethical fund aligns with their values, where does our responsibility end — and the client’s begin?
This article sets out a clean, legally coherent framework for answering that question.
1. The Core Boundary: FCA-Regulated vs CMA-Regulated Activity
The first thing to be precise about:
Generic financial planning is not “unregulated.”
It is regulated — just not by the FCA.
FSMA defines and reserves specific financial services activities (e.g. advising on investments, arranging deals, managing assets) for FCA authorisation.
Everything else still sits within:
- UK consumer law
- Competition & Markets Authority (CMA) standards
- Misrepresentation law
- Professional negligence law
- Duty of care principles
So the real boundary is not:
“regulated vs unregulated”
It is:
FCA-regulated financial advice
vs
CMA-regulated consumer guidance and information services
2. What Total Wealth Planners Legitimately Do
At the heart of Total Wealth Planning is a simple operating principle:
We design the thinking architecture.
We do not supply the transaction answer.
Our lawful, CMA-regulated role sits in five domains:
- Education – explaining financial concepts and trade-offs
- Frameworks – how to structure decisions
- Decision criteria – what factors matter and why
- Process design – how to move from intention to action
- Values clarification – what “success” actually means to the client
So, for example:
✔ Explaining how to evaluate ethical funds
✔ Highlighting greenwashing risks
✔ Discussing cost structures and stewardship models
✔ Teaching how to compare fund objectives to personal values
✔ Helping a client articulate ethical priorities
All of this is:
- Outside the FCA perimeter
- Inside CMA-regulated consumer services
- Subject to normal negligence and misrepresentation standards
What we do not do (unless FCA-authorised):
✘ Recommend a specific fund
✘ Endorse a specific provider
✘ Tell a client to buy, sell, or switch
✘ Take control of the transaction decision
This keeps us outside FSMA investment advice.
3. What Changes When AI Enters the Picture?
Now consider a typical scenario:
A client uploads:
- their personal values statement
- a fund factsheet
- and asks an AI tool (e.g. ChatGPT or Perplexity) to assess alignment.
Here’s the legally important distinction:
The AI is a third-party decision-support tool used by the client — not our agent.
We are:
- Providing process and criteria
- Teaching them how to evaluate
- Designing the decision framework
The client is:
- Choosing the tool
- Entering the data
- Interpreting the output
- Making the final decision
This mirrors the logic in BPE Solicitors v Hughes-Holland and Manchester Building Society v Grant Thornton (see notes):
- We are not assuming responsibility for the entire decision chain
- We are not directing a specific transaction
- We are not controlling the outcome
So legally:
- We remain outside FCA advice liability
- But we remain inside CMA consumer standards
- And inside professional negligence principles
Which means:
We must still be accurate, transparent, fair, and not misleading —
even when staying outside FCA-regulated advice.
4. Why You Still Need a Disclaimer (But Not Legal Theatre)
Yes — you need a disclaimer.
No — not because you’re “unregulated.”
You need it because you are:
- Providing a consumer service
- Using a third-party AI tool
- Operating in a decision-support context
A proportionate, CMA-aligned disclaimer looks like this:
Suggested wording
“This service provides education and decision-support tools, not regulated financial advice. Any AI-generated outputs are third-party information and may contain errors or omissions. They should be independently verified. You remain responsible for all financial decisions and should seek FCA-authorised advice before acting on any specific product choice.”
This protects:
- The client – by slowing impulsive action
- You – by defining scope and responsibility
- The Academy model – by reinforcing empowerment over delegation
It is not about evading responsibility.
It is about accurately describing the service you are providing, which is a CMA requirement.
5. The Deeper Operating Principle
If you remember nothing else, remember this:
Total Wealth Planners build minds, not portfolios.
The cleanest legal framing is:
- We design the thinking architecture
- We do not supply the transaction answer
- We never collapse options into a “you should buy X” moment
- We always return agency to the client
This keeps us firmly in:
CMA-regulated guidance and information
not
FCA-regulated investment advice
And it aligns perfectly with the Academy’s founding philosophy:
Replace extraction with empowerment.
Replace dependency with sovereignty.
Replace opaque advice with transparent agency.
6. A Simple Decision Test for Practitioners
When using AI with clients, ask yourself:
Am I…
- Teaching them how to think?
- Giving them criteria to apply?
- Letting them choose the tool?
- Keeping them as the decision-maker?
- Avoiding any product endorsement?
- Being accurate, fair, and not misleading in what I say?
If the answer is yes to all six:
- You are outside the FCA perimeter
- You are compliant with CMA consumer standards
- You are inside Total Wealth Planning territory
If you start doing this instead:
- “This is the fund you should use.”
- “This one is better for you than the others.”
- “I recommend switching to this product.”
…you’ve crossed into FCA-regulated advice.
7. Why This Matters for the Future of the Profession
AI isn’t a threat to ethical financial planning.
It is the tool that finally makes client sovereignty scalable.
Used properly, it allows us to:
- Democratise financial understanding
- Reduce dependence on conflicted sales advice
- Deliver high-quality planning at a fraction of today’s cost
- Empower people to be their own financial advisers
This is not a regulatory loophole.
It is a new professional category:
CMA-regulated financial guidance
supported by AI
structured by human wisdom.
Final Thought
The role of a Total Wealth Planner in the AI age is not to compete with algorithms.
It is to curate wisdom, structure decisions, and protect human agency.
Do that — and you stay on the right side of:
- FCA law
- CMA law
- ethics
- and history.
One-line CTA (Academy-branded)
The Academy of Life Planning is the home of the GAME Plan and the GAME Plan Practitioner accreditation — training the next generation of Total Wealth Planners to work ethically, intelligently, and client-sovereign within both FCA and CMA regulatory boundaries.
Academy of Life Planning CMA Rule Book
The Academy of Life Planning CMA Rule Book sets out the ethical, legal, and professional foundations for Total Wealth Planning as a modern, consumer-first discipline. It explains how our services operate outside the FCA perimeter while remaining fully accountable under UK consumer law, including the Consumer Protection from Unfair Trading Regulations, the Digital Markets, Competition and Consumers Act 2024, and professional negligence standards. The document defines the boundaries between information, generic guidance, and regulated advice; establishes clear client engagement rules; prohibits misleading or coercive practices; and codifies our commitments to transparency, fairness, and client sovereignty. It is both a practitioner standard and a public trust charter — showing exactly how empowerment-based financial planning can be delivered lawfully, ethically, and responsibly.
Download the CMA Rule Book to understand the regulatory logic behind Total Wealth Planning and the standards that underpin the Academy’s work.
Here’s a concise summary of the key findings and legal principles from BPE Solicitors v Hughes-Holland and Manchester Building Society v Grant Thornton that matter for understanding when professional input becomes advice versus information, and the consequences for liability:
1) BPE Solicitors v Hughes-Holland [2017] UKSC 21
Core legal takeaway: The UK Supreme Court clarified how the SAAMCO principle applies to professional negligence, especially the distinction between “advice” and “information” for the purposes of scope of duty and damages.
Facts in brief:
A client loaned £200,000 based on his understanding of how the funds would be used. His solicitors prepared the legal documentation but failed to correct a misunderstanding about the purpose of the loan. The client later sued them for negligence after losing the money. (Lexology)
Key findings:
• Scope of duty is critical (not just causation):
The Court emphasised that the relevant question is whether the loss suffered falls within the scope of the professional’s duty, not simply whether the negligent act caused the loss. (Lexology)
• Distinction between advice and information:
- Advice involves assuming responsibility for guiding the whole decision-making process.
- Information is a contribution to the client’s own decision-making, limited in scope. Even if the information supplied is critical to the decision, that does not automatically make it “advice.” Liability for an information case is limited to the foreseeable consequences of that information being wrong, not the entire loss from the client’s overall choice. (lawprof.co)
• Application to the case:
The solicitors were providing information (documentary services and limited contractual wording) rather than full advice on the transaction’s merits. Therefore, their liability did not extend to all of the losses the client suffered. (Lexology)
Why it matters:
This case remains central to professional negligence law because it restates that not all professional involvement is “advice” for liability purposes — even if the information supplied heavily influences a client’s choice. (lawprof.co)
2) Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20
Core legal takeaway: The Supreme Court refined the SAAMCO framework on professional negligence, especially the scope of duty concept, and moved away from a rigid binary between advice and information.
Facts in brief:
Grant Thornton advised Manchester Building Society that it could use a specific accounting method (hedge accounting) to manage interest rate risk. The advice was wrong. When the society had to unwind interest rate swaps at huge cost, it sued for losses. (Kingsley Napley)
Key findings:
• Scope of duty should be understood in terms of its purpose:
The court held that the duty of care owed by a professional should be judged by reference to the purpose for which the advice was given, not simply by classifying the input as “advice” or “information.” (A&O Shearman)
• The SAAMCO distinction is useful but not rigid:
The Supreme Court said the classic SAAMCO test (distinguishing advice cases from information cases, with corresponding damage limits) should not be applied rigidly. Instead, courts should look at whether the loss suffered was the type of harm the duty was meant to guard against, based on the objective purpose of the duty assumed. (A&O Shearman)
• Application to the case:
Although earlier courts treated the accountant’s role as ‘information’ only, the Supreme Court found that the losses were within the scope of the duty because the advice was given to enable the society’s core business decisions. The society did suffer losses of the type the duty was supposed to guard against. (A&O Shearman)
• Damages and contributory negligence:
The Supreme Court allowed recovery of losses but reduced the award due to contributory negligence because part of the society’s losses stemmed from its own business decisions. (A&O Shearman)
Practical Legal Principles for Planners
1. Scope of duty matters more than labels:
It’s not enough to call something “information” or “advice.” Courts look at the purpose for which the professional input was given when ascertaining liability risk and the extent of recoverable loss. (A&O Shearman)
2. Liability is tied to the duty’s protective purpose:
If a professional’s duty was to enable someone to make a transaction or take a particular action, and the harm the client suffered relates to that purpose, liability may be broader than a simple information-only framing suggests. (A&O Shearman)
3. Professional input that shapes decision-making can still be “information” if the professional did not assume full responsibility for the overall decision:
The classic example from BPE v Hughes-Holland shows that even if what you supply is critical to a client’s assessment, you may still be treated as providing information rather than holistic advice — but the loss scope must be carefully considered. (lawprof.co)
If it would help, I can turn these summaries into a one-page legal brief for your internal guidance or client-facing education materials.
Academy of Life Planning 