With great power comes great responsibility. It’s essential to understand the nature of and risks associated with the use of AI and ensure we’re safeguarding the information clients entrust to us.
Client Confidentiality: Never input sensitive client information into an AI tool, including names, addresses, social security numbers, account numbers, and any personally identifiable information (PII). Sharing this information with AI is the same as sharing it with multiple third parties. Even if you are assured the tool won’t learn from your data, these technologies are evolving quickly. Invariably, mistakes will be made along the way that could result in a data breach that will require client notification.
Company Information: You and your employees must refrain from sharing confidential information about your business, ESI, or National Life Group with artificial intelligence tools. These tools are designed to assist with general queries and provide information based on publicly available data. Because nothing shared with AI is confidential, sharing proprietary information, trade secrets, or sensitive data in an uncontrolled environment like AI chat tools can lead to unauthorized access, data breaches, and potential harm to the Company. It is crucial for employees to prioritize the protection of company information by not inputting sensitive data into open AI tools, such as ChatGPT.
Limitations: Recognize the limitations of AI tools. They do not replace human judgment nor be used for critical decisions. Instead, they can enhance your services and improve efficiency. Think about AI as a guide, as opposed to an autopilot.
Training and Supervision: Train all staff members who will use the AI tool. Training should cover effective use of the tool, maintaining client confidentiality, and compliance with relevant regulations. Regular supervision ensures these standards are met.
Examples of proper AI use include writing generic marketing copy, mapping out schedules for social media postings, getting ideas for client appreciation events, and creating meeting agendas.
Improper use of open access AI technology includes, but is not limited to: feeding it client information to determine your ideal client, acting blindly on securities suggestions, inputting a client’s financial plan and asking for changes, and scanning a prospect’s statement for analysis.
AI is a rapidly evolving technology. At this point in the product’s development, every possible use of the technology cannot be foreseen. For that reason, please remember several different requirements of ESI, including:
- Section 2.1 of ESI’s Written Supervisory Procedures – requires Registered Representatives to conduct the Firm’s business with high standards, and to always be fair and honest while dealing with customers.
- Section 2.16 of ESI’s Written Supervisory Procedures – requires Registered Representatives to submit all advertising to the Advertising Guidance Team for approval prior to use.
- Section 5.2.16 of ESI’s Written Supervisory Procedures – prohibits the distribution of research reports.
- Section 5.4 (and its various subsections) of ESI’s Written Supervisory Procedures – describes the Firm’s requirements dealing with correspondence, including:
- Section 5.4.5 – requires review by the Advertising Guidance Team before using sales materials prepared by third parties.
- Section 5.7 of ESI’s Written Supervisory Procedures – prohibits the use of investment analysis tools which have not been reviewed and approved of by the Firm.
- Section 5.9.3 of ESI’s Written Supervisory Procedures – prohibits the sharing of nonpublic financial information with unapproved third parties.
- Sections 11.5 (Suitability) and Section 25 (Regulation Best Interest), and their various subsections, of ESI’s Written Supervisory Procedures – which address suitability standards and Reg BI requirements, respectively.
Under any circumstance, you must adhere to existing Firm guidelines for data security, preapproval for marketing content, and email communication. Even if AI generates the content, you are still responsible for its generation and use.
ESI will continue to monitor the development of AI systems and, depending on how the uses for the tool evolve, additional guidance may be forthcoming.
Questions
If you have any questions about this requirement, please contact the ESI Business Architecture team at 800-344-7437.
TC134744(0723)1