How To Reconcile AI Opacity And Advisers' Fiduciary Duties

Manatt Financial Services Partner authored an article for Law360 on how the growing use of artificial intelligence (AI) in the workplace is impacting how investment advisers approach their fiduciary duties and what they can do to ensure they remain compliant and responsible when using these tools.

As advisers increasingly rely on AI to inform investment decisions, Wolk explained that long‑standing duties of care and loyalty, particularly the requirement that advice rest on a reasonable, independently formed basis, are colliding with technologies whose inner workings may be difficult or impossible to explain. He explored why advisers cannot simply defer to AI outputs without meaningful human oversight, how regulatory guidance from the SEC, FINRA and other bodies is elevating expectations around transparency and explainability, and why vendor due diligence and disclosure are becoming essential components of AI governance. Wolk also outlines best‑practice guardrails for responsible AI adoption, emphasizing that AI can support, but not be a substitute for, informed professional judgment.

“The duty of care has always required advisers to do more than hand a client someone else's analysis, and AI does not change that principle; it simply raises the bar for what meaningful understanding requires,” he wrote.

Law360 subscribers can read the full article .