Develop and Document Policies and Procedures: Establish clear policies regarding the use of AI tools within the RIA. This should cover areas such as client communication, investment decisions, and data handling.
Provide Clear Disclosures: Ensure that clients are adequately informed about the use of AI in their investment management and communications.
Ensure CCO Comprehension: Verify that the RIA's Chief Compliance Officer (CCO) has a thorough understanding of each AI tool's capabilities and limitations.
Document AI Decision-Making: Maintain comprehensive records of all AI-driven decision-making processes, including inputs, outputs, and the rationale behind decisions.
Implement Testing, Monitoring, Risk Assessment, and Training: Regularly test and monitor AI tools for accuracy and compliance, conduct risk assessments, and provide adequate training to staff on AI usage.
Avoid "AI Washing": Ensure all claims about AI capabilities are accurate and substantiated. Avoid exaggerating or misrepresenting the technology's potential.
