# Governing AI use in an advisory firm

> How fiduciary duty, marketing rules, recordkeeping and Regulation S-P apply to AI tools in an advisory firm, and what an inventory needs.

- Web page: https://www.alesanalytics.com/docs/governing-ai-in-an-advisory-firm
- Markdown: https://www.alesanalytics.com/docs/governing-ai-in-an-advisory-firm.md
- Last updated: 2026-11-08
- Publisher: Ales Analytics

Industry guide. Fiduciary duty, marketing claims, records and vendors. Published 2026-11-08. Last reviewed 2026-11-08. Reviewed by Ales Analytics engineering.

## Who it applies to

Registered investment advisers, wealth managers and family offices whose staff use AI tools, whether built in-house, bought, or embedded in software the firm already pays for.

## What it requires, in plain terms

There is no single US rule written specifically for AI in advisory firms. Existing obligations apply to it.

- **Fiduciary duty and conflicts.** Advice produced with the help of a model is still the adviser's advice. In 2023 the SEC proposed a rule on conflicts of interest from predictive data analytics; it withdrew that proposal on 12 June 2025. The underlying fiduciary duty did not change.
- **Accurate marketing.** Claims about using AI are claims like any other. In March 2024 the SEC settled charges against two advisers for misleading statements about their use of AI, a practice commonly called "AI washing".
- **Books and records, privacy and cybersecurity.** AI tools that read or produce client information fall under the same recordkeeping, Regulation S-P and vendor oversight obligations as other systems.
- **Examinations.** SEC examination priorities have repeatedly named the use of emerging technology, including AI, as an area of focus.

## Key dates

As of November 2026:

| What                                                  | When          |
| ----------------------------------------------------- | ------------- |
| SEC settled "AI washing" charges against two advisers | 18 March 2024 |
| Predictive data analytics proposal withdrawn          | June 2025     |
| Regulation S-P amendments, smaller entities           | 3 June 2026   |

## What it means for your systems

- **An inventory.** A register of every AI tool in use, who owns it, what data it reads, where it runs, and what it is allowed to do. Many firms find AI features already switched on inside existing software.
- **Checks on outputs.** For any tool whose output reaches a client or a regulatory filing, a documented way of checking it, and a record that the check happened.
- **Marketing review.** Any statement about AI in pitch books or on the website is reviewed like any other performance or capability claim.
- **Vendor terms.** Where client data goes, how long it is kept, and whether it is used to train the vendor's models.

## Official sources

- [SEC: charges against two investment advisers for misleading statements about AI (press release 2024-36)](https://www.sec.gov/newsroom/press-releases/2024-36)
- [SEC: withdrawal of proposed regulatory actions, June 2025](https://www.sec.gov/rules-regulations/2025/06/s7-12-23)
- [NIST AI Risk Management Framework](https://www.nist.gov/itl/ai-risk-management-framework)

## How this connects to our work

The software register described on the [Investment firms](https://www.alesanalytics.com/industries/investment-firms) page is this inventory, kept current and linked to checks on what each tool produces. See also the explainers on [the AI inventory](https://www.alesanalytics.com/explainers/ai-inventory) and [model risk management](https://www.alesanalytics.com/explainers/model-risk-management).

## Contact

solutions@alesanalytics.com, or https://www.alesanalytics.com/contact.

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