When consumers can interrogate the advice they receive, will the profession’s traditional business model withstand scrutiny?
The Retail Distribution Review removed commission bias. Consumer AI may expose asset-retention bias. And Consumer Duty could make that exposure commercially consequential.
These three developments are connected. Together, they could fundamentally change the future of financial planning.
For decades, the financial advice industry has operated through a substantial imbalance of information. Advisers understood financial products, investment markets, regulation and charging structures. Most consumers did not.
That imbalance helped sustain a business model in which financial planning was frequently bundled with investment management, and professional remuneration was linked to the amount of financial capital brought under management.
Artificial intelligence is changing that relationship.
Consumers can increasingly examine financial recommendations, interrogate charges, compare alternatives and ask questions that previously required specialist knowledge.
Meanwhile, the FCA’s Consumer Duty requires regulated firms to act to deliver good outcomes for retail customers.
One development gives consumers greater power to scrutinise. The other requires firms to demonstrate that their conduct and services deliver good outcomes.
That is the perfect storm facing traditional financial advice.
1. The lesson the industry should have learned from the RDR
The UK’s Retail Distribution Review (RDR), implemented at the end of 2012, prohibited product-provider commission on new advised retail investment business.
The Financial Services Authority, predecessor to the FCA, recognised that commission created three forms of bias:
- Provider bias: recommending providers because they paid higher commissions.
- Product bias: favouring products offering greater remuneration.
- Sales bias: recommending transactions because adviser income depended on making sales.
The regulator recognised that financial incentives could distort professional recommendations, even when advisers believed they were acting in their clients’ interests.
The fundamental issue was structural.
The person recommending the financial product was financially rewarded by another party for arranging its sale.
Removing commission was intended to make adviser remuneration more transparent and reduce the influence of product providers over financial recommendations.
But the reform left an important question unanswered.
Did we eliminate remuneration conflicts, or merely replace one set of incentives with another?
2. From commission bias to asset-retention bias
Following the RDR, many financial advice firms adopted ongoing charges calculated as a percentage of assets under advice.
These charges are generally agreed with clients rather than determined by product providers.
That is an important difference.
Nevertheless, the economic incentive deserves scrutiny.
Consider someone with £500,000 invested, paying their adviser 1% annually.
The adviser receives £5,000 a year.
Now suppose the client considers:
- Repaying £150,000 of mortgage debt.
- Purchasing an annuity to secure retirement income.
- Gifting £100,000 to help their children.
- Spending some accumulated wealth to enjoy retirement.
- Moving to a simpler, lower-cost investment arrangement.
- Replacing continuous advice with periodic professional assistance.
Several of these decisions might reduce the assets generating the adviser’s fees.
That does not mean the adviser would recommend against them. Many conscientious advisers regularly recommend actions that reduce their own income.
But it does create a potential conflict between the client’s financial interests and the firm’s commercial interests.
I call this asset-retention bias.
It is the potential incentive to favour recommendations that preserve assets under advice over otherwise suitable alternatives.
The RDR addressed commission-driven conflicts. Asset-retention bias raises a related question about the incentives created by percentage-based remuneration.
The two arrangements are not legally identical. Nor is every percentage-based charge inappropriate. The issue is whether the economic incentive affects recommendations or the value of continuing services.
A disclosed conflict is not necessarily a resolved conflict.
3. Consumer Duty changes the accountability
The FCA’s Consumer Duty makes this more than a question of professional ethics.
Its overarching Consumer Principle requires firms to act to deliver good outcomes for retail customers.
Three cross-cutting rules require firms to:
- Act in good faith towards retail customers.
- Avoid causing foreseeable harm.
- Enable and support retail customers to pursue their financial objectives.
Four further outcomes address products and services, price and value, consumer understanding, and consumer support.
These obligations should influence how firms design their services, recommend solutions, assess their charges and monitor customer outcomes.
Consider the implications for asset-based financial advice.
If repaying debt best serves a client’s objectives, the adviser should not discourage that decision simply because it reduces the firm’s income.
If an annuity provides appropriate retirement security, the potential loss of assets under advice should not influence its consideration.
If a client no longer needs comprehensive ongoing advice, the firm should consider whether its continuing service represents fair value.
And if a client can achieve their objectives through a simpler, less expensive arrangement, the adviser’s business model should not determine which alternatives are presented.
Consumer Duty should mean putting the client’s interests first, even when doing so is commercially disadvantageous to the firm.
The existence of a potential conflict does not, by itself, establish a Consumer Duty breach. The evidence would need to demonstrate shortcomings in conduct, value, service or outcomes.
Nevertheless, the question is unavoidable.
Can firms demonstrate that their recommendations and continuing charges serve their clients’ interests, including when the best decision reduces the assets from which the firm earns its fees?
If the regulator gave that question greater attention alongside its growth agenda, it could reveal important opportunities to strengthen consumer protection.
4. AI gives consumers the ability to investigate
Historically, most clients lacked the expertise to challenge their financial adviser on technical matters.
Even where charges were disclosed, understanding their long-term consequences required financial knowledge and considerable effort.
AI is reducing those barriers.
A consumer can now upload a suitability report, adviser agreement, fee statement or financial plan and ask questions such as:
On conflicts of interest:
“Identify recommendations where my adviser’s remuneration could be affected by the decision.”
On alternatives:
“What other ways could I achieve my financial objectives without retaining all these investments under advice?”
On value:
“Explain what I am paying annually for ongoing advice, what services I am entitled to receive, and what evidence would demonstrate fair value.”
On financial independence:
“Which decisions require regulated investment advice, which could benefit from specialist assistance, and which might I reasonably manage myself?”
On the business relationship:
“How would my adviser’s income change if I withdrew assets, purchased an annuity, repaid debt or ended the ongoing advice arrangement?”
These are legitimate questions.
AI will not always answer them correctly. It can misinterpret documents, overlook circumstances and produce inaccurate calculations. General-purpose AI is not a substitute for regulated personal recommendations or specialist professional judgement.
But it gives consumers something they previously struggled to obtain.
An accessible way to formulate better questions and independently challenge the explanations they receive.
The adviser no longer has exclusive control over how the client understands their financial situation.
5. The FCA can already see the direction of travel
The regulator’s own research indicates that this transformation is gathering momentum.
In July 2026, the FCA published its Mills Review examining the implications of AI for retail financial services.
Research commissioned for the review suggested that approximately one in five UK adults—around 11 million people—would be willing to use AI capable of acting autonomously within agreed boundaries.
Willingness to use AI is not the same as adoption. Nevertheless, it demonstrates the potential scale of consumer interest.
The FCA also identified significant changes in consumer journeys, competition and market power.
Meanwhile, its work on ongoing financial advice has placed renewed attention on whether firms deliver services for which customers continue to pay.
The FCA’s 2025 review found that the vast majority of ongoing suitability reviews examined had been delivered, although shortcomings requiring remediation were also identified.
That distinction matters. The evidence does not support a sweeping claim that ongoing advice is generally undelivered.
The emerging question is broader:
Even when the promised service is delivered, does the customer need it, does it represent fair value, and does it help them achieve their objectives?
AI may make that question easier for consumers to investigate.
6. What happens when consumers begin asking?
I expect three overlapping changes.
First: greater scrutiny of ongoing charges
Consumers will increasingly compare the amount they pay with the work undertaken and the alternatives available.
A percentage-based fee may be particularly difficult to explain where the portfolio has grown substantially but the work required has not increased proportionately.
There may be excellent reasons for a particular charging structure. Firms will need to explain them convincingly.
Second: financial planning and investment management become more distinct
Consumers may increasingly question why receiving a financial plan requires them to place investment assets under an adviser’s supervision.
Planning and investment management are related activities, but they are not the same service.
A person may need help with family decisions, retirement choices, debt, employment, business succession or financial resilience without requiring someone to manage their investments.
Others will genuinely benefit from comprehensive regulated investment advice and ongoing portfolio management.
The important development is greater freedom to choose which services are needed.
Third: professional value moves towards human judgement
AI can make calculations, explain financial concepts, compare documents and model scenarios.
But decisions about a person’s life involve more than financial optimisation.
They involve values, relationships, uncertainty, health, purpose, fear, confidence and competing priorities.
Good financial planners help people navigate those decisions.
As technical information becomes more accessible, the distinctive value of experienced professionals may increasingly lie in judgement, interpretation, emotional intelligence, accountability and support at important moments.
The future planner will need to explain what the client gains from their involvement, not simply what the portfolio gains from their management.
7. My projection: the profession towards 2035
I do not expect financial advisers to disappear.
I expect a more diverse profession to develop.
Investment specialists will continue serving clients who need professional portfolio management.
Complex pensions, taxation, estate planning and later-life decisions will still require appropriate specialist expertise.
Some consumers will value an ongoing relationship and happily pay for it.
Others will prefer to operate their own AI-supported financial planning systems, bringing in human expertise when circumstances justify it.
The traditional assumption that financial planning must lead to an enduring relationship built around investment assets will become increasingly difficult to sustain.
I anticipate a shift from an asset-centred industry towards a person-centred planning profession.
Instead of measuring success principally through assets under management, firms may increasingly be challenged to demonstrate improvements in:
- Financial understanding and decision-making capability.
- Confidence and independence.
- Progress towards personal goals.
- Financial resilience and security.
- The quality of important life decisions.
- The client’s ability to act without unnecessary professional dependency.
These outcomes are not all easily quantified. Developing credible ways to evidence them will itself become an important professional responsibility.
8. The opportunity for independent financial planners
At the Academy of Life Planning, we have been developing a different approach since 2012.
We start with the person rather than their portfolio.
Our Total Wealth Planning approach recognises that financial capital is only one part of a person’s wealth.
Human capital—knowledge, skills, health, relationships, creativity, earning capacity and the ability to make decisions—matters enormously.
We combine structured planning, AI-supported tools and human assistance to help people become more capable of directing their own lives.
The principle is straightforward:
Self-directed by default. Supported when it matters.
This does not eliminate every potential conflict. Fixed fees, subscriptions and coaching arrangements can also create incentives that require thoughtful management.
Nor does it eliminate the need for regulated advice where the activities involved require it.
But it changes the central commercial proposition.
The client does not have to surrender control of their financial assets to receive financial planning.
The planner earns income by helping the person understand, choose and act.
And professional success can include helping clients become progressively less dependent on professional intervention.
This model also presents a commercial challenge. Practitioners must demonstrate value, develop trusted relationships and sustain viable businesses without relying on asset accumulation.
That is a challenge worth solving.
9. The perfect storm could become a professional renewal
Consumer Duty, artificial intelligence and changing consumer expectations are often discussed separately.
They should be considered together.
Consumer Duty creates obligations around good outcomes, fair value and consumer understanding.
AI gives consumers greater capacity to examine whether those obligations are being met.
And changing expectations may encourage people to seek planning arrangements that preserve their independence.
The combination could expose weaknesses in business models built on permanent asset retention.
But it could also create opportunities for professionals willing to demonstrate their value in other ways.
The profession has an important choice.
It can use AI primarily to make existing business models more efficient.
Or it can use AI to help clients become more capable, informed and independent.
Ideally, it should do both.
The real test is whose interests the technology ultimately serves.
Institutional AI can make the firm more efficient. Sovereign AI can make the person more capable.
The financial planning profession that flourishes in the coming decade may be the one that successfully combines both ambitions.
The question I would leave with the profession
In 2012, the regulator recognised that commission arrangements could distort financial recommendations because of the incentives they created.
In 2026, Consumer Duty requires firms to deliver good consumer outcomes, while AI increasingly enables consumers to question whether they are receiving them.
If the best financial decision for a client reduces the adviser’s income, can the firm demonstrate that the recommendation remains wholly focused on the client’s interests?
That question will become harder to avoid.
And it points towards a different definition of professional success.
The financial planning profession of the future will not be defined by how much financial capital it manages, but by how much human agency it restores.
Steve Conley
Founder, Academy of Life Planning
Bring me your problem, not your portfolio.
Sources for the blog
These primary sources support the regulatory and research claims. The forecasts and the concept of asset-retention bias are my interpretation of the economic incentives, rather than established FCA findings.
- FCA — RDR inducements and conflicts of interest: confirms that preventing remuneration from distorting advice was a central RDR objective. FCA
- FCA — About the Consumer Duty: outlines the cross-cutting rules and four consumer outcomes. FCA
- FCA — The Mills Review: reports consumer appetite for agentic AI. FCA
- FCA — Ongoing financial advice services: sets out findings on service delivery and remedial action. FCA
- FCA — Adviser charging rules: explains upfront disclosure and ongoing service charging requirements. FCA
