“If I was an adviser I would be using standard components that are plug and play into Office or Google workspace.
"From Morningstar’s perspective, when we are creating solutions we test any partner we're using, how they use the model, how they build out the inference engine and where our data passes.
“If it's customer data, it's a red line for us. We don't allow that to go on any models that are not held within our own hosted environment.”
Smith also believed it was just a “too big a risk” to partner with a start up AI firm when advisers could test some of these AI capabilities in a far safer way.
He asked: “Can advice firms really evaluate a generative AI start-up and how they’re going to use the data when it’s not fully regulated at the moment?
"When you own the client relationship and you have the highest bar of regulatory oversight, it’s too high a risk/reward for something that is not going to transform your practice enough. This is versus getting it in a scalable component that is embedded in software that is in a higher regulated business model.”
alina.khan@ft.com
