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White paperMichael Clark
The File Records the Answer, Not the Reasoning
Many advice firms file the tools in their suitability process under AI regulation and defer the work, yet COBS 9A.2.9R already requires those tools to be fit for purpose, appropriately designed for the firm's clients and to have their limitations identified and actively mitigated, and COBS 9A.2.23R keeps the firm responsible where advice is automated. Most advice files record what the tools produced rather than the basis of the recommendation. A mitigation log and a departure rate query come first, then version binding, a ten-field record and segmented outcomes monitoring.
Key findings
- COBS 9A.2.9R requires suitability tools to be fit for purpose, designed for the firm's clients, and to have any limitations identified and actively mitigated.
- Under COBS 9A.2.23R, a firm that advises in whole or in part through an automated or semi-automated system remains responsible for the suitability assessment.
- Most advice files record what the tools produced, not the inputs, versions, alternatives and adviser contribution that formed the basis of the recommendation.
In the paper
- COBS 9A.2.9R reaches the tools themselves
- The file keeps the output, not the basis
- The judgement defence has to be evidenced
- CP26/10 would put more weight on the record
- Tools change, and averages can hide vulnerable clients
- Where the AI Act sits
- The first day
Michael Clark
Chief Executive Officer, Standard Intelligence
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