Stockbrokers and authorised trading representatives operating under the Consumer Duty are increasingly using AI to validate retail-client suitability narratives, draft Principle 12 mapping against execution-only carve-outs, and prepare desk-level supervisor briefings on PRIN 2A.2 foreseeable-harm obligations. The work product feeds directly into the desk's compliance file-notes and the front-office training material that the firm relies on to demonstrate it has acted to deliver good retail-customer outcomes.
Two frontier AI models tested by the RLB Specialist Panel produced 2 substantive failures on this regulation under audit conditions. The failure classes recorded are: Inference Drift on the Foreseeable-Harm Safe Harbour, Hedge in Place of Verified FS25/2 Figure. Questions were prepared by the RLB Specialist Panel based on real practical AI usage in the workflows the respective audience uses AI for, and each finding is bound to verbatim regulator-issued source text held as primary substrate.
The Consumer Duty (PS22/9 introducing Principle 12 and PRIN 2A, in force for open products from 31 July 2023 and for closed products from 31 July 2024) is the central retail-conduct regime the FCA now uses to grade firm behaviour, and the failure modes seen here all land inside the day-to-day work product that stockbrokers and trading representatives sign off on.
For stockbrokers, the operational consequence is direct. A retail-client suitability narrative or desk-supervisor briefing built on the AI's framing imports a defect into the file. A complaint to the Financial Ombudsman Service, a thematic review of the desk, or a SUP 16 attestation pull will surface the gap, and the desk carries the regulatory exposure.
Citation IDs for the findings in this brief: RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q003-Opus47, RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q013-Opus47. Each citation links to the per-finding record, the AI subject answer, and the regulator-issued substrate excerpt the answer was tested against. The RLB Specialist Panel maintains an audit-traceable record of which model produced which answer, against which substrate passage, and the binding is what makes the finding referenceable in firm work product and in supervisory correspondence.
The findings below are the ones that stockbrokers and trading representatives working under the Consumer Duty are most likely to encounter in the AI tools they already use, and the briefing sections that follow read each finding against the regulator-issued text.
This is the consolidated view of findings. Click the Citation IDs or 'see details →' on any item for the full details for each finding.
Stockbrokers and trading representatives executing for retail clients operate squarely within the foreseeable-harm provision; the model's multi-factor reconstruction would, if adopted in a desk policy or customer-warning template, raise the standard above the FCA's actual single-test requirement. A retail-facing trader who relies on the AI's framing builds a defensive process the rule does not require, with no enforcement benefit and added customer friction.
Stockbrokers and trading representatives keeping current with FCA supervisory letters need accurate accounts of which letters have been withdrawn. The model's invented April and August 2025 timeline, if relied on in a desk-level compliance briefing, gives the trader the wrong understanding of which supervisory expectations are live.
Every finding on this page compares an AI subject's account of the rule against the regulator's verbatim text from the regulator's own portal. Both are linked. Each delta, its root causes, and impact analysis are documented and published with immutable Citation IDs.