FCA authorised · FRN 724952 0117 325 0027Quote & buy →
Aipedia: Financial advisers
Advice firms can use AI to draft complaint responses and Financial Ombudsman Service submissions, but inaccurate AI material can damage the firm's case and its PI position. The FOS has already flagged a rise in AI-generated material containing errors.
Part of: AI in Financial advisers
In short
AI tools can summarise complaint files, draft final response letters and prepare FOS submissions. The Financial Ombudsman Service estimates AI likely contributed to up to 35% of responses to its initial assessments in a small early sample, and has seen lengthy AI-assisted submissions with multiple inaccuracies. Complaints handling remains subject to DISP 1. PI insurers usually expect complaints that could become claims to be notified, and many policies require insurer consent before admissions or offers. An AI-drafted letter that concedes liability or misstates facts can create coverage problems.
Complaints handling is document-heavy. Firms use AI to summarise the advice file, build a chronology, compare the complaint against the suitability report, draft the final response letter and prepare responses to the Financial Ombudsman Service. Claims management companies and professional representatives use AI on the other side too, generating complaints and lengthy submissions at scale.
In its April 2026 response to the Mills Review, the Financial Ombudsman Service said it receives "very few complaints about a firm's use of AI". But it estimated that AI likely contributed to up to 35% of responses to initial assessments in a small early sample. It described professional representatives filing AI-assisted submissions of around 200 pages, with multiple inaccuracies, in response to a provisional decision of six to eight pages.
The FOS asked the FCA for clarity on record keeping, human escalation and AI-to-AI disputes, and said it wants a "clear rationale on how AI contributed to an outcome". It also noted that advice from unregulated individuals, firms or AI platforms is outside its remit.
An AI-drafted final response may misstate the advice, cite the wrong document, or adopt the complainant's framing. It may concede points the firm would contest, or offer redress without proper analysis. In a FOS submission, an inaccuracy can undermine the firm's credibility on everything else.
Illustrative scenario: a firm uses AI to draft a final response to a complaint about a drawdown recommendation. The draft summarises the client's objectives from the complaint letter rather than the fact-find and accepts that the client "was not told" about investment risk. The firm sends it without review. The client takes it to the FOS, and the firm's own letter becomes evidence against it. The PI insurer had not been notified before the response was sent.
Adviser PI policies commonly require notification of complaints or circumstances that might give rise to a claim, and many say the firm must not admit liability or make offers without insurer consent, subject to the wording. Some policies treat FOS complaints within the excess differently. An AI-drafted letter that admits fault or offers redress without consent can prejudice cover. See how PI responds to FOS claims, FOS jurisdiction and DISP and PI notification traps for IFAs.
Apex arranges PI for financial advisers. A broker can review your cover and how your policy treats AI-assisted work, including notification and consent conditions for complaints. See AI in financial advice and Does adviser PI cover AI mistakes?.
Yes, but DISP 1 and the Consumer Duty still apply, and the firm remains responsible for accuracy. A qualified person should check every fact against the file and approve any admission or offer before the letter is sent.
In its April 2026 response to the Mills Review, the FOS estimated AI likely contributed to up to 35% of responses to initial assessments in a small early sample, and described lengthy AI-assisted submissions with multiple inaccuracies. It wants a clear rationale on how AI contributed to an outcome.
Many adviser policies require notification of complaints or circumstances that might lead to a claim, and some require consent before admissions or offers. Check your wording, and notify early if in doubt.
Not simply because AI was used. The firm must investigate the substance under DISP 1. Check factual claims carefully against your records, as AI-generated complaints may contain inaccuracies.
Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.
Start a PI quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.
