In short: whoever advises you about money works for you. Their pay never depends on what you buy. A machine adviser says it is a machine, says whose it is, and has a person or firm that answers for it.
Selling in disguise
A couple in their sixties ask their bank’s adviser where to put their retirement savings. The adviser recommends a fund with high fees. The fund pays the bank, and part of that payment reaches the adviser. The advice was not illegal, and the adviser may have believed it. But the couple never knew that the person they trusted was paid by the product.
The framework already holds this line elsewhere: an estimator is never paid for the direction of a figure (who measures), and a companion may carry no hidden placements (persuasion and companionship). Financial advice is the same conflict, with people’s savings at stake.
A duty to the client
Anyone who gives financial advice, whether a person, a firm, or a machine, owes a duty to the client: to advise in the client’s interest, to explain the reasons, and to disclose anything that could pull the advice another way. Guidance that is general and unpaid, such as a newspaper column, is not advice to a client and is not covered.
No pay tied to the product sold
Advisers may be paid a flat fee, by the hour, or as a share of what they manage, set openly and agreed in advance. They may not be paid by the makers of the products they recommend, or earn more when a client buys one product rather than another. A firm that both makes products and advises on them must keep the two apart and say so to every client.
Machine advisers
Machine advisers will soon reach more people than human advisers ever did. They fall under the rules for autonomous agents and for persuasion:
- Disclosure. A machine adviser says it is a machine, and whose it is, at the start of every conversation about money.
- An answerable party. A named person or firm answers for what it advises, and for the harm when it advises badly (responsibility address).
- No paid placements. No product may pay to be recommended, mentioned, or ranked higher inside the advice.
- Limits on what it may do alone. A machine adviser that can also act, moving money or buying products, carries caps on what it may commit without the client’s approval, and every action can be reversed within a set window.
- No exploiting what it knows. A machine adviser that can read a client’s fears or circumstances may not use them to steer the client toward what pays its owner (inference is not jurisdiction).
What advice cannot promise
Good advice is not a promise of returns. The duty is to advise in the client’s interest and to explain the risks, not to guarantee results. Clients who chose a risk that was explained to them carry its outcome. Clients who were steered by a hidden seller do not.
In the transition
The duty to the client and the ban on pay tied to products can start now. Some places already require a duty to the client for some advisers, and some have banned commissions on certain products, which shows the rule works. Machine advisers should be brought under it before they become the main way people get advice, not after.
Who resists, who backs it
| Rule | Resists | Backs |
|---|---|---|
| A duty to the client for all advice | firms whose advisers are paid to sell | savers, retirees, fee-only advisers already working this way |
| No pay tied to products | product makers that pay for distribution | consumer groups, independent advisers |
| Machine advisers disclosed and answerable | firms building cheap advice at scale on product payments | regulators, the first people harmed by machine advice |
What stays open
- Where general guidance ends and advice begins, once machine guidance is tailored to each person.
- How a client harmed by a machine adviser gets repaid quickly, without having to prove anyone intended the harm.