Florida Banking April/May 2025

legal professionals can enhance both efficiency and effectiveness. How Advisors Can Use AI Responsibly To mitigate risks, advisors should: • Verify all AI-generated recommendations before presenting them to clients. • Ensure compliance with ethical and regulatory standards when using AI tools. • Protect client confidentiality by avoiding inputting sensitive data into public AI platforms that lack proper security measures. • Use AI as a tool, not a replacement for independent judgment. • Monitor for bias by regularly auditing AI models to ensure fairness in lending, investments and risk assessments. • Use AI as a supplement – not as a replacement – by combining AI insights with human expertise and judgment. • Enhance – not automate – decisionmaking by having AI assist in analysis, but not replace your fiduciary responsibility • Stay updated on AI regulations and industry best practices While AI can enhance efficiency, research and portfolio management, it should never replace human expertise and ethical responsibility. Smart advisors will embrace AI as a supplement – not as a substitute – for sound financial judgment. And with that, “AI deposit my final thought.”

Within seconds, it will provide five connections, three of which could be refined and used. To illustrate AI’s predictive nature, one can start lectures by asking audiences to complete phrases like “bread and __” or “as a matter of __.” Just as humans rely on learned patterns, AI does the same – only at scale. So, we are aware AI can help write and even re-write, but what are some concerns? The Risks: AI’s Hallucinations and Legal Pitfalls While AI can be a valuable tool, it comes with risks. Consider these AI-generated responses to two prompts: 1. Do you generate false information? ChatGPT replied: “Yes, AI models like me can sometimes produce inaccurate, misleading or entirely fabricated content. This occurs because my responses are based on statistical patterns rather than actual knowledge.” 2. Can advisors face ethical and legal consequences for using AI – respond in short sentences: ChatGPT responded: “Yes, advisors can face ethical and legal consequences for using AI. Regulatory Violations – Misuse of AI can breach SEC, FINRA and CFPB rules Confidentiality Breaches – Inputting client data into AI may violate privacy laws Bias and Discrimination – AI-driven decisions can lead to unfair lending or investment practices

Inaccurate Advice – AI can generate misleading financial insights, harming clients Unauthorized Practice – Over-reliance on AI without proper oversight can be problematic Fiduciary Duty Violations – AI-generated advice must align with client best interests Legal Liability – Bad AI-driven recommendations can lead to lawsuits or penalties.” Embracing AI with Caution Like calculators before it, AI is here to stay. Rather than ignoring or fearing it, the best approach is to embrace AI’s potential while staying mindful of its limitations. By learning how to use AI responsibly,

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