Claude for advisers has regulators and competitors on alert

The Australian Securities and Investments Commission says it is closely monitoring developments such as Anthropic’s Claude for financial advisers which was announced on 15 September.

An ASIC spokesperson tells Professional Planner the regulator is monitoring developments alongside with peer regulators to assess possible implications for the Australian market.

The new Claude product is currently available in the US via integrations with technology vendors such as Salesforce and Vanguard.

Between clearing regulatory requirements and setting up data centres, among other things, Claude’s new feature may take two years to reach Australia, if it comes at all. That can get even more complicated if it involves super funds, as trustees would have to sign off on member data being shared with other technology services providers.

Incumbent Australian tech vendors are also watching the offshore developments closely as a potential threat to the established order emerges.

“I still feel it’ll be quite a few years probably before this happens in a meaningful scale. But I do feel it is inevitable at some point that advisers are going to want this capability,” Finura Group joint managing director Peter Worn tells Professional Planner.

The benefit of using an LLM such as Claude is considerable, especially for firms currently using many different advice tech systems.

“The ability to have an AI agent go in and scoop data from all those providers without actually having to build direct integrations would be, I think, quite valuable for advice businesses who need to produce documentation and reports for clients across those providers. That’s probably the real benefit,” Worn says.

He warns, though, that there is a potential risk if advice businesses are using Claude as their “primary desktop” as they aren’t protected by the “data security agreements that you would typically get from the industry-specific solutions like Iress’ Xplan, as an example, that really manages that data security for you”.

“You’re taking a bit more risk on at the practice level as to what happens with that data after it leaves the platforms,” he says.

“The second threat is to the platforms themselves and to some of the legacy advice technology providers who probably don’t necessarily want advisors switching their primary desktop from their solutions to something like Claude, because then they really would potentially become just a provider of data, and not an actual provider of all the other services that are typically built into platforms and advice tech solutions at the moment.”

ASIC says all participants in the financial system have a duty to balance innovation with the responsible and ethical use of emerging technologies.

“We acknowledge the benefits emerging technologies can bring to support the provision of quality and compliant advice to customers in a timelier and more efficient way,” the regulator says.

“AI tools have considerable potential to assist financial advisers in their work, lower the cost of providing advice and expand access to advice to more Australians. 

“New AI tools can also lead to cyber risks escalating in both scale and sophistication. ASIC expects financial services licensees to be on the front foot every day to ensure that their customers and clients aren’t put at risk by inadequate controls.”

Claude for advisers

Four days after OpenAI launched a ChatGPT version for the financial services industry, Anthropic announced Claude for financial advisers. The ChatGPT product is designed to help teams develop research, financial models, and customised client materials and was developed in partnership with Morgan Stanley and Evercore.

The Claude product is designed to connect CRM, custodian, portfolio reporting, financial planning software, estate tools, and meeting capture.

The pre-built skills in the plugin for financial advisers includes things ranging from adviser onboarding to prepping for a client meeting. Firms can either adopt these or adapt them to fit their own workflows. The skills gather information, summarise it, and draft client communications across the adviser’s day.

Anthropic makes it clear that investment recommendations, client communications, compliance determinations, and other regulated activities remain subject to human review and approval.

Worn says that that US financial advisers are able to use this service because Claude is based in the US and there are no data sovereignty issues. Furthermore, the US platform providers that are now sharing data with Claude are probably of the view that there’s more intense competition in that market.

“So there’s probably been an element there where no one wants to be left out,” Worn says.

The integrations to these platforms are read-only, so Claude cannot interact with them, and these agreements work by having the adviser or person using Claude take on all the risk of what happens with that data the minute it leaves those custodians and enters their Claude environment.

“These are sort of key issues that I think we would not be ready for here in Australia just yet,” Worn says.

Netwealth proposed acquisition of AI company Paradino

In between Open AI and Anthropic announcements, Netwealth revealed plans to acquire AI advice workflow and automation platform Paradino. The ASX-listed company said this would improve adviser productivity and capacity by automating key advice workflows.

“Our focus is on supporting advisers to grow their businesses and achieve their ambitions. A key part of this is helping advisers increase productivity so they can support more clients and spend more time delivering advice,” Netwealth CEO and managing director Matt Heine said in a statement.

“Together, we believe we can create Australia’s leading AI-enabled wealth management and adviser productivity platform. By combining Paradino’s workflow capability with Netwealth’s platform, data and adviser ecosystem, we look forward to helping our existing and future adviser clients operate more efficiently, improve outcomes for their clients and support the growth of both businesses.”

In an ASX filing, Netwealth said Paradino’s capability complements Netwealth’s existing platform, technology and data solutions and will deliver significant efficiency benefits to advisers.

The $20 million acquisition, with a further $9 million in earn-out and retention consideration payable over four years is subject to approval and expected to be completed by the end of October.