A firm called Moritz law is already changing legal advice in the UK, and it is a useful indicator of what may be coming in middle of the road retail financial services. Upload the documents, and AI gives out 80% of the advice, delivering it as “draft advice” and a lawyer then arrives to sign it off, all within a 24-hour window. Moritz-style is perfect for retail-ifa space.... halfway between using Gen Ai and not being able to trust it fully or have sufficient confidence and DIY investing. What could possibly be easier?
“What could possibly go wrong?” is more likely the question for anyone with a sense of history. Robo adviser Nutmeg stands out as a parody of failure. It has consumed roughly £230m in cumulative accounting losses, since the 2012 launch, in addition to JPMorgan paying around £700m to acquire it and rename it as J.P. Morgan Personal Investing. In 2025 it even lost more money (£58m) than it received in turnover (£45m)!
The difference this time is that the FOS is having her wings clipped and will no longer be able to act as a quasi-regulator. Now all judgements on misselling complaints will be made within the context of FCA rules applying at the time. FOS can no longer set the pace, and say, “You complied with the FCA rules, but we still think it was unfair.” Better still, FOS “can only consider rules that were in force at the time of the act or omission giving rise to a complaint.” So, today’s standards cannot be applied to judgements on events that took place many years ago.
In addition FCA Policy Statement PS25/22 has got a decent take up among the providers and allows for some providers to make suggestions to clients, nudging them subtly towards other investment choices.
But is Moritz style half AI/ half remote advice work merely repeating the failures of the Robo-project? Have things really changed? Investments and pensions are hardly transactional one offs, as legal work can so often turn out to be, and even discussion life insurance is an intensely personal affair.
A short history course reminds us that back in 2014 FCA reacted to the increasing cost of advice post RDR by actively promoting automated/robo-advice in 2016 as a policy solution to the advice gap. Just 2 years later the FCA criticised the robo standards in each of the following key areas: suitability, fact-finding, disclosure and risk-capacity for loss. Doom all around. The project was torpedoed by its promoter. But AI and a change in investment climate cannot be ignored as a new way in for the investor who cannot quite make the DIY move and isn’t quite happy with the full service IFAs they meet.
Using AI to extract the full FF out of the customer is an extension of the chat box of old. Better tech will make it more user friendly. They can upload documents remotely and commit to an automated question and answer session with the AI, that may just be smart enough to jolly things along a bit. Following that stage one, the AI can churn out “this is what other people just like you usually do” advice in draft format, with an ultra-warning to get this checked in full, perhaps for a further fee. An adviser then signs it off.
The trouble is that you’ve got to pay before you get the automated advice. If you don’t like paying for an adviser, paying a machine is even more painful. Commission is banned in the fee only wealth advice world, so they won’t be collecting the money from assumed fund sales. IFA and mortgage broking advice is secure because they operate a highly personal service, and no machine is able to recreate the subtlety required. Law firms are not subtle, not personal and mostly transactional. I rest my case. There has never been a better time to be an adviser.