Does the SEC require disclosure of AI use to clients

As of 2026, the SEC does not have a blanket rule requiring RIAs to disclose AI use to clients — but if AI plays a meaningful role in your investment process, your client communications, or creates a material conflict of interest, it likely belongs in Form ADV Part 2. The proposed predictive data analytics rule would tighten this further once finalized.

When AI use likely needs disclosure

• AI plays a meaningful role in investment selection or recommendations.
• AI is used in marketing in a way the client would reasonably want to know about.
• AI creates a material conflict of interest (e.g., the model is owned by a related party).
• AI is used in any client-facing automated tool (chatbot, lead scoring shown to client).

When disclosure is probably not required

• AI used purely for internal back-office productivity — meeting prep, scheduling, internal summaries.
• AI used for marketing copy that a human reviews and approves before send.
• AI used to draft client communications that a human reviews and signs.

What to put in your ADV

If disclosure is needed, describe in plain language what the AI does, who reviews it, what data it has access to, and how the firm manages the associated conflicts and risks.

Why this matters

Compliance counsel are increasingly conservative about AI disclosure because the SEC's pattern is to treat AI like any other material business practice. Better to over-disclose than to defend a finding.

This is general information, not legal advice. Talk to your compliance counsel.

Quiet Machines installs an AI brain inside advisory firms in a 3-day on-site build. Free AI visibility audit →