This Week in Brief

This week’s stories centre on where the line sits between AI as a productivity tool and AI as a competitive threat. Aveni’s chief executive used the FCA’s Mills Review warning about AI firms and “market power” to argue advice is facing its own “Uberisation” moment, an adviser wrote candidly about where AI should stop being trusted with client decisions, and the EU AI Act’s first enforceable deadline landed on 2 August — a reminder that AI rules are arriving on more than one front.

Key Developments

FCA’s Mills Review Warning on AI “Market Power” Draws Fresh Industry Reaction

Aveni chief executive Joseph Twigg used a Professional Adviser column to respond to FCA executive director Sheldon Mills’ warning — made in his Mills Review into AI and retail financial services — that large AI firms risk becoming the “major source of market power” in financial advice as the fight for ownership of the customer interface intensifies. Twigg argues advisers can’t assume regulation alone will protect their role, and need to actively defend direct client relationships now. Update: this builds on the Mills Review covered in previous digests, this time zeroing in on the competitive threat to advice firms specifically, rather than the review’s broader recommendations. (Professional Adviser, 5 August 2026)

Adviser Voice: “AI Must Support, Not Replace, Advisers”

Ahmed Bawa of Rosemount Financial Solutions wrote that while younger clients are increasingly turning to tools like ChatGPT and Claude for everyday money management — checking spending patterns, for instance — the calculus changes sharply once questions move into more consequential territory such as pensions or investment decisions. His piece is a useful prompt for firms to be clear-eyed with clients about the difference between “AI can” and “AI should.” (Professional Adviser, 5 August 2026)

EU AI Act’s August Deadline Puts Cross-Border AI Use Back on the Agenda

Transparency obligations under the EU AI Act became enforceable from 2 August 2026, requiring AI chatbots and tools to disclose that they’re AI and for AI-generated content to be labelled accordingly — though the tougher “high-risk system” rules have been pushed back to December 2027. Most UK-only IFAs sit outside scope, but firms using AI tools that touch EU-resident clients, or evaluating platforms built for EU markets, should check whether they’re caught before assuming this doesn’t apply to them.

From the Trade Press

  • “AI is fast turning into an asset allocation story, not just a technology story” — Franklin Templeton’s Lisa Wang argues the market debate is shifting from whether AI matters to who captures the economic value from it, useful background for advisers fielding client questions about AI-heavy portfolios. Professional Adviser, 7 August 2026

What to Watch

Keep an eye on whether the “Uberisation” framing of the AI market-power risk prompts more advice-tech M&A activity, following Tavistock’s acquisition of Plus Group, or firm-level moves to shore up direct client relationships instead. The FCA’s promised guidance on AI accountability under SM&CR, due by the end of 2026, remains the deadline that will determine how seriously firms need to formalise their AI governance.

Sources: Professional Adviser, web search. Compiled 10 August 2026.