Mills Review reminds us to proceed with caution

Katie Brinsden, Managing Director of Truly Independent, assesses the Mills Review and its messages on artificial intelligence.

According to the Financial Conduct Authority, the recently published Mills Review sets out how artificial intelligence could reshape retail financial services. With the best will in the world, its conclusion that the impact could be significant hardly qualifies as a big reveal.

The findings are perhaps best thought of as official confirmation of what most of us in the industry have strongly suspected for some time. Specifically, AI is likely to change how firms operate, how consumers make decisions, how markets compete and how risks emerge.

Although couched in regulator-speak, the review’s recommendations are also largely predictable. They include urging the FCA’s board to “secure and adapt the regulatory perimeter”, “strengthen system-wide coordination and oversight” and “enable the foundations for agentic finance”[1].

In other words, Mills acknowledges that AI is poised to bring radical disruption and that the FCA needs to muster a meaningful response. We can frame the fundamental message rather more eye-catchingly – but in no way disingenuously – by saying it is high time to stave off the threat of a Wild West scenario.

On the whole, if anything, the review strongly hints at an issue that has defined the tension between progress and regulation for decades. In short: the latter frequently struggles to keep pace with the former.

We might therefore infer that the race to catch up is now well and truly under way. While it unfolds, in my opinion, advisers may wish to reflect on the merits of staying at least a little behind the curve themselves.

Between impatience and inertia

To date, rightly or wrongly, the FCA has actively encouraged firms to develop, test and utilise AI. To that extent, the industry has served as its very own Petri dish.

On the one hand, there is much to be said for this freedom to experiment. Ideally, as the FCA has argued, it could drive innovation, benefit consumers and boost the competitiveness and status of financial services in the UK[2].

On the other hand, limited regulatory oversight can also give rise to the type of free-for-all that ultimately does more harm than good. We witnessed something along these lines before the Retail Distribution Review helped drive out the many market participants whose keenness to deliver “advice” far outweighed their respect for professional standards.

Where might a happy medium be found in this instance? What constitutes a golden mean between carte blanche and iron-clad constraint? This, it seems, is the challenge the regulator is now being urged to confront in earnest.

Yet the future does not rest exclusively in the hands of the FCA. Crucially, every adviser faces the very same challenge – particularly while waiting for the powers that be to deliver some form of definitive ruling.

Is this is a final window of opportunity for those determined to carve out what they perceive as an advantage? Or is the shrewd option simply to sit tight and await guidance from on high?

The appeal of a gentle embrace

Realistically, no firm can afford to stand still in the current climate. As the Mills Review makes clear, AI has to be embraced.

On balance, though, embracing it gently is likely to be the most prudent course of action. The potential rewards obviously come with potential risks – and any firm that yearns to be tantalisingly close to, at or even beyond the cutting edge would do well to recognise as much.

As I wrote just over a year ago, we have had our own brush with inadequate and inappropriate tech at Truly Independent. Confined to a software demonstration, the encounter was mercifully brief yet sufficient to underline the perils of striking out in the wrong direction in this ever-evolving arena[3].

Looking back, I suppose the experience might almost have been amusing. But in the final reckoning, all things considered, it was instead deeply disconcerting.

The Mills Review suggests AI could transform our industry by 2030. There appears to be little reason to dispute such a prediction. All being well, a key consequence of this great reshaping will be a profession that is far nearer to achieving the long-elusive goal of advice for everybody.

However, amid the scramble to stay abreast of developments, a sensible measure of caution could be no bad thing. Given that no-one quite knows where this journey will take us, advisers might usefully bear in mind an old but ever-relevant adage: “Act in haste, repent at leisure.”

Katie Brinsden is Managing Director of Truly Independent.

[1] See, for example, Financial Conduct Authority: “AI and the future of retail financial services (the Mills Review)”, July 6 2026 – https://www.fca.org.uk/publications/corporate-documents/mills-review.

[2] See, for example, Financial Conduct Authority: “AI and the FCA: our approach”, September 9 2025 – https://www.fca.org.uk/firms/innovation/ai-approach.

[3] See IFA Magazine: “You couldn’t make it up – but AI just did”, June 19 2025 – https://ifamagazine.com/adviser-insight-you-couldnt-make-it-up-but-ai-just-did-truly-independents-katie-brinsden-warns-of-the-risks-of-the-wrong-tech/.