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Aipedia: Wealth managers and discretionary fund managers
Fraudsters can now use AI voice and video to impersonate wealth management clients and redirect withdrawals, so recognising a client on a call is no longer verification. The FCA warned in March 2026 that AI and deepfakes increase financial crime risk.
Part of: AI in Wealth managers and discretionary fund managers
In short
AI voice cloning and video deepfakes let fraudsters pose as clients, attorneys or senior staff to change bank details and withdraw funds. The FCA's March 2026 Consumer Investments priorities say AI and deepfakes increase financial crime risk, and the Consumer Duty requires firms to avoid foreseeable harm. Controls should include call-backs to numbers on file, passphrases, cooling-off periods and dual approval. If money is lost, PI, crime and cyber cover may each respond to part of the loss, depending on whose money it was and the wordings, and gaps between them are common.
Wealth managers hold large balances for clients who often deal with a single named portfolio manager by phone, video or email. That makes them a target for impersonation. Fraudsters use AI voice cloning and video to pose as a client asking to change bank details and withdraw funds, or as a family member or attorney authorising a payment. The same tools can impersonate a firm's own senior staff instructing operations to release money, or a platform or custodian contact asking for a change to settlement instructions. The FCA's March 2026 Regulatory Priorities: Consumer Investments report says AI and deepfakes increase financial crime risk, and the 2026 wealth management survey lists fraud and cyber among the risks firms discussed.
The usual pattern is urgency plus a plausible channel. The request arrives on a call or video meeting that looks and sounds right, often shortly after a genuine contact, and asks for a change of bank details and a withdrawal at the same time.
Illustrative scenario: a long-standing client's portfolio manager receives a video call from someone who looks and sounds like the client, explaining they are abroad and need funds for a property purchase. A follow-up email from a lookalike address provides new bank details. Operations process the withdrawal because the portfolio manager confirms they spoke to the client. The genuine client discovers the loss weeks later and holds the firm responsible for releasing their money.
Which policy responds depends on whose money was lost and how. The answers below are typical, but always depend on the wordings:
| Loss | Policy that may respond |
|---|---|
| Client claims the firm negligently paid their money to a fraudster | PI, as a third-party claim for negligent service, subject to any fraud or funds transfer exclusion |
| Firm's own money stolen or firm reimburses client before any claim | Crime cover, often only with a social engineering extension |
| Compromised systems, investigation and notification costs | Cyber cover |
Gaps are common: PI may exclude loss of client money, crime cover may require the firm itself to have suffered the loss, and cyber may need a system breach. See CEO fraud and deepfake payment scams and how cyber and PI overlap for wealth managers.
Apex arranges PI for wealth managers and discretionary fund managers. A broker can review how your PI, crime and cyber policies fit together for impersonation losses and where the gaps are. More on social engineering and fund transfer fraud and at AI in wealth management.
If the client claims the firm negligently released their money, PI may respond as a third-party claim, subject to the wording. Some policies exclude loss of client money or funds transfer fraud, so check the exclusions and whether crime cover fills the gap.
It depends on the facts. If the firm released money without following reasonable verification steps, a client or the ombudsman may hold it responsible. If the client authorised the payment themselves, the position is different. Consumer Duty expectations to avoid foreseeable harm make strong controls the best defence.
On its own, it may not be. The FCA's March 2026 priorities say AI and deepfakes increase financial crime risk. Combine call-backs to numbers on file, passphrases, cooling-off periods for new bank details and dual approval.
Contact the receiving bank immediately to try to freeze funds, report to the police and relevant authorities, notify your PI, crime and cyber insurers, and preserve call recordings, emails and logs. Speak to the genuine client through a verified channel.
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.
