AI Compliance · Financial Services

AI That Won't Trigger an Examination Finding.

Your client communications are going through AI tools that don't archive anything. FINRA just listed AI as a 2025 examination priority. I help financial advisors and RIAs choose AI tools that actually meet compliance requirements.

Threat Assessment// PRIORITY: HIGH

The compliance gap regulators are looking for

FINRA and SEC have made it clear: existing rules apply to AI. Most advisors haven't updated their supervisory procedures to reflect that.

"The AI I'm using doesn't archive conversations — that's probably a recordkeeping violation." — FINRA Rule 4511 requires preservation of all business communications. Client emails drafted by AI, meeting summaries, recommendations — all covered. Most consumer AI tools provide zero archiving.

"If an AI tool gives a client a recommendation, is that considered investment advice? Am I liable?" — Yes. Reg BI and fiduciary obligations don't transfer to AI vendors. You're responsible for every recommendation, even AI-assisted ones.

"FINRA is going to examine me and find out I'm using AI tools I haven't documented." — FINRA Regulatory Notice 24-09 explicitly reminds firms that ALL existing rules apply to generative AI. AI is a 2025 examination priority.

"I told clients AI is reviewing their portfolios — was that misleading?" — The SEC has already fined firms for "AI washing" — falsely claiming AI capabilities. Settlements of $400K–$2M each.

Compliance Framework// REGULATIONS

What FINRA and SEC require

No new AI rules — but existing regulations cover everything. FINRA RN 24-09 makes this explicit.

FINRA Rule 3110 — Supervision

All use of AI tools must be supervised. Firms need written supervisory procedures (WSPs) covering AI use — who can use which tools, for what purposes, and how outputs are reviewed.

FINRA Rule 4511 — Books & Records

Client communications are business records — including AI-generated emails, meeting summaries, and chat logs. Required retention: 3 years easily accessible, 5 years total. Most consumer AI tools don't archive at all.

FINRA Regulatory Notice 24-09 (June 2024)

Explicit reminder that ALL existing FINRA rules apply to generative AI usage. No new rules needed — existing supervision, recordkeeping, and fair dealing obligations cover the space fully.

SEC Regulation Best Interest (Reg BI)

When AI is used to generate client recommendations, advisors are still responsible for ensuring recommendations are in the client's best interest. AI cannot be used to shift fiduciary liability.

SEC Marketing Rule (206(4)-1)

AI-generated testimonials, endorsements, and marketing copy must comply. Fake reviews or AI-generated testimonials are prohibited. All AI-generated content requires review and approval.

SEC Books & Records (Rule 204-2)

Communications with clients via AI must be archived. 3 years accessible, 5 years total. Microsoft Copilot can be configured for this; most other AI tools cannot.

Regulatory Penalties
SEC: fines up to $1M per violation (individuals) / $10M (firms)
SEC: disgorgement of profits + industry bars
FINRA: fines, suspensions, permanent industry bans
State securities regulators: license revocation
Civil liability from clients for unsuitable AI-generated recommendations
SEC AI washing settlements: $400K–$2M per case (2024)

Recent Enforcement

SEC AI Washing Cases (2024)

Delphia (USA) Inc. and Global Predictions Inc. fined for falsely claiming AI capabilities in marketing materials. Settled for approximately $400K each.

FINRA Examination Findings (2023–2025)

Multiple firms cited in exam findings for inadequate supervision of AI tools — no WSPs covering AI, no archiving of AI-generated communications.

SEC AI Task Force (2025)

Formal examination priority — AI compliance specifically called out in exam letters. Dedicated enforcement unit for AI-related violations.

Solution// DEPLOY READY

How Brian helps financial advisors get compliant

I don't sell compliance software. I help you audit your AI tools, update your WSPs, and implement systems that satisfy examiners.

AI Tool Compliance Audit

Complete inventory of every AI tool in use — CRM features, email AI, portfolio analytics, consumer tools your team uses for client work. Each evaluated against FINRA and SEC requirements.

WSP Updates for AI

Your written supervisory procedures updated to cover AI usage — which tools are approved, review requirements for AI-generated recommendations, and documentation standards.

Recordkeeping Configuration

Help you configure AI tools for compliant archiving, or replace non-compliant tools with alternatives that meet FINRA 4511 and SEC 204-2 requirements.

Compliant Tool Selection

Whether it's Microsoft Copilot with proper archiving, compliant AI transcription, or purpose-built RIA tools — I help you choose tools that work within your regulatory framework.

Ready to Get Compliant?

30 minutes. We'll review your current AI tools and identify compliance gaps specific to your practice.

Book a Strategy Call
/// Free Assessment

The RIA AI Compliance Scorecard

20 questions to find your regulatory exposure before FINRA or SEC does. Score your compliance in under 10 minutes.