The number of advice professionals already using AI as part of their business has increased from 29% to 60% in the last year, The Lang Cat has revealed.

The financial services consultancy’s latest State of the Advice Nation (SOTAN) reported that this figure rose to 88% for firms with over £1bn in assets under management (AUM).

In the survey, advice professionals ranked AI as the one of the most important areas of change in the industry, with 81% stating that it was more important to their business in 2025.

Insight director at The Lang Cat, Steve Nelson, stated: "AI discourse is everywhere and with SOTAN, we wanted to make sure we understood how it was affecting the advice sector. What is clear is there is an appetite and an application for its use within advice firms, with usage doubling from last year.

"Firms are finding it useful for administration, meeting notes, data handling and report drafting. However, there is still a reticence about using it for client-facing tasks or for anything that’d lessen the involvement of human judgement.

"Where we are seeing nervousness around adoption, despite AI being available, affordable and increasingly capable, is in a lack of regulatory frameworks to ease adviser's minds where there are understandable concerns around regulation and compliance."

The Lang Cat also found that almost half (46%) of professionals cited trust in outputs as being the primary issue and 40% pointed to compliance and regulatory concerns.

While AI tools are "available, affordable and increasingly capable", the report found that it was suggested a lack of regulation may mean that firms lack shared norms around acceptable use that would be needed to have more confidence in adoption.

Although firms do not generally view AI as more of an opportunity than a threat, these positive views tend to shift when considering it replacing judgement and reducing the need for skilled individuals.

When asked about comfort levels with AI-generated recommendations in client-facing advice, respondents scored an average 4.1 out of ten, indicating a general caution. This is also a point of difference when it comes to smaller firms and larger firms with those with AUM under £50m scoring a 3.5 and larger firms with AUM between £250m and £500m scoring at 6.5.

Nelson concluded: "Firms lack shared norms around acceptable use and if there was more direction in this area, this may lead to greater levels of comfort in adoption. It is also worth noting that over a third registered that they were uncomfortable on some level with data security when using AI in financial advice.

"As much as we’re seeing the welcoming of innovation, it’s important that development doesn’t come at the expense of other critical elements like data security. This is obviously all moving at a fast pace, but it certainly looks like AI in one way, shape or form will continue to play a role in advice."

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