{"id":277759,"date":"2025-11-11T13:59:09","date_gmt":"2025-11-11T13:59:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/277759\/"},"modified":"2025-11-11T13:59:09","modified_gmt":"2025-11-11T13:59:09","slug":"canada-needs-guidelines-for-ai-use-in-financial-advice-report-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/277759\/","title":{"rendered":"Canada needs guidelines for AI use in financial advice, report says"},"content":{"rendered":"

As Canadians shoulder more responsibility for their retirement savings, many are \u201cflying blind\u201d in an increasingly complex financial landscape, a new C.D. Howe Institute report warns. It calls for clear guidelines on how artificial intelligence<\/a> should be used in financial advice, among other recommendations for stronger government action on financial literacy.<\/p>\n

The report, released Tuesday, says declining access to employer pensions and low levels of financial literacy are leaving households ill-equipped to make major money decisions, from choosing between registered retirement savings plans and tax-free savings accounts to figuring out how to turn savings into income after retirement.<\/p>\n

The report argues that AI could play a key role in helping Canadians make smarter financial decisions in a cost-effective way, but the government should establish guardrails around how the technology is used. Without proper oversight, the technology could mislead users, the report said.<\/p>\n

Step aside, human advisers. AI may become the new financial planning powerhouse<\/a><\/p>\n

\u201cWe\u2019ve pushed all these responsibilities to the individual Canadian,\u201d said Bernard Morency, co-chair of the C.D. Howe Institute\u2019s Pension Policy Council and one of the report\u2019s authors. \u201cWe don\u2019t see a co-ordinated approach.\u201d<\/p>\n

Beyond technology, the report says Canada needs a national strategy to strengthen financial education, recommending the appointment of a leader within the government who can be responsible for co-ordinating retirement policy. It argues that financial literacy, supported by accessible advice and trustworthy technology, must form the foundation of a retirement system where individuals are increasingly on their own.<\/p>\n

The authors outline three potential uses for AI: teaching basic financial literacy through chatbots or virtual assistants; helping human advisers process client data and tailor their recommendations; and providing direct financial advice to consumers.<\/p>\n

The last option, Mr. Morency said, is also the riskiest. \u201cAI can give you an answer that is just not right,\u201d he said. That\u2019s why it\u2019s crucial to have clear guidelines and a \u201cminimum understanding so that you can read the answer with a critical eye.\u201d<\/p>\n

The report suggests the government could work with regulatory bodies or professional organizations, such as FP Canada, which certifies financial planners, to build a public AI-powered financial literacy tool trained on the expertise of certified advisers. Such a tool, Mr. Morency said, would be more trustworthy than one built by a private company.<\/p>\n

\u201cIt\u2019s more credible because the government isn\u2019t trying to sell you anything,\u201d said Mr. Morency, adding that a government-built tool could use data the public sector already holds, such as CPP contributions or employment history, to provide more personalized and realistic guidance.<\/p>\n

\u201cImagine if there was a way that you could access this information and they could say, \u2018Here\u2019s a reasonable expectation in terms of what you\u2019re going to get from the public plans, and here\u2019s the shortfall.\u2019\u201d <\/p>\n

Canadians increasingly concerned over AI-generated content, survey finds<\/a><\/p>\n

The report also calls for Ottawa to set clear standards for how AI is deployed in financial services, including auditing and reporting requirements, data privacy compliance, and \u201chuman-in-the-loop\u201d safeguards to catch errors and biases.<\/p>\n

\u201cThe challenge is not simply giving Canadians more tools but ensuring they can use them wisely,\u201d the report says. \u201cFinancial literacy, complemented by advice and technology, must be the foundation of a system that helps households land the plane safely.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"As Canadians shoulder more responsibility for their retirement savings, many are \u201cflying blind\u201d in an increasingly complex financial…\n","protected":false},"author":2,"featured_media":277760,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185,4825],"class_list":{"0":"post-277759","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-finance","12":"tag-personal-finance","13":"tag-personalfinance","14":"tag-r-fp"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/277759","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=277759"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/277759\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/277760"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=277759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=277759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=277759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}