Wealth Management
The FCA’s recent Mills Review highlights how rapidly AI is reshaping financial services. Consumers are delegating more financial activity to AI, firms are automating a growing number of decisions, and the FCA itself plans to use AI to supervise increasingly complex markets. For wealth and asset management firms, the implications are particularly significant.
A knowledge-intensive industry, wealth and asset management is a in which differentiated value comes from combining trusted data, investment expertise, client understanding and human judgement. The winners will not necessarily be the firms that deploy the most autonomous AI, but those that build AI-enabled services customers, advisers and regulators are prepared to trust.
Why the FCA has acted now
The FCA’s central premise is that retail financial services are moving from human-led interactions towards AI-enabled, continuous and increasingly delegated services. The Mills Review identifies four systemic shifts:
- The transformation of firm operations
- New consumer journeys
- A reshaped competition landscape
- Amplified fraud and cyber risk.
It also finds that one in five UK adults is already open to AI acting autonomously within pre-set goals. This combination of technological acceleration and emerging consumer appetite means that waiting for AI models, customer behaviors or market structures to settle is not a credible strategy.
The FCA is not proposing a separate AI rulebook: its principles-based, outcomes-focused approach continues to rely on frameworks such as Consumer Duty and the Senior Managers & Certification Regime. At the same time, the Review recommends that the FCA monitor the transition to autonomous models, enable the foundations for agentic finance, scale its AI Lab and develop an AI-enabled supervisory model.
In short, the FCA is creating more room for responsible innovation while preparing for a market in which both firms and regulators use AI more extensively.
Why wealth and asset managers are particularly exposed – and particularly advantaged
As noted, the wealth and asset management industry is built on knowledge: client circumstances, goals and preferences; portfolio and product data; research and market intelligence; policy and regulation; and the expertise of advisers, investment professionals and operations teams. AI becomes strategically valuable when it can combine these knowledge domains.
This creates three near-term shifts:
- Consumers will increasingly begin their financial journeys through general-purpose AI, app-based assistants and ‘wealth concierge’ experiences. These tools may shape the questions clients ask, the providers they consider and the expectations they bring to an adviser conversation.
- Firms will automate more of the work that precedes, informs and follows a regulated decision – from gathering evidence and identifying gaps to drafting recommendations, coordinating controls and triggering downstream actions.
- Regulators will need more sophisticated data and AI capabilities to supervise markets in which customer journeys, communications and decisions are increasingly dynamic.
Although AI initiatives focused on operational efficiency are often the lowest-hanging fruit and the least disruptive to implement, forward-thinking wealth and asset management firms should look beyond them to the broader, more innovative opportunities aligned to the above shifts.
These will create more responsive and personalized services, increase adviser capacity, reduce friction in onboarding and ongoing reviews, and extend support to customers who are currently underserved.
Figure 1 – AI Adoption & Maturity Scale (source: Capco)
We observe that a majority of wealth and asset managers are at the lower end in the Aware/Augment phase of maturity, leveraging ‘safe’ use cases such as meeting note summaries, knowledge copilots and simple workflow automations.
The FCA’s outcomes-based approach means firms can progress without waiting for a dedicated AI rulebook. Its recommendations on autonomous models, agentic infrastructure, testing and AI-enabled supervision make clear that the market is expected to mature. Firms should therefore explore more transformative AI use cases and explore the delegation of tasks using agentic AI, whilst simultaneously building the controls and operating model that make Integrate and Redesign use cases defensible.
How Capco can help
Capco helps wealth and asset managers turn this agenda into an executable transformation program. This includes designing AI-enabled customer propositions such as wealth concierge journeys; identifying value pools and prioritizing use cases; reshaping adviser, investment and operations models; establishing WAM-specific governance and control architectures; assessing model, data and third-party risk; and mobilizing delivery from controlled testing through to scaled adoption.
To discuss how your organization can move from AI experimentation to accountable growth, contact Capco’s Wealth & Asset Management team.
References
https://www.fca.org.uk/publications/corporate-documents/mills-review
https://www.fca.org.uk/news/press-releases/fca-publishes-landmark-review-impact-ai-retail-financial-services
https://www.fca.org.uk/firms/innovation/ai-approach
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