30th July 2025
6 AI Prompts to Make Investment Risk More Understandable
We’re currently navigating one of the most volatile periods of 2025. April’s global market shock, sparked by sweeping U.S. tariffs, led to the worst two-day sell-off since 2020. The FTSE 100 dropped nearly 5% in a single session, and bond markets swung wildly in response to political and economic uncertainty.
The ripple effects are ongoing: trading platforms have seen surging activity, advisers are fielding nervous questions, and the IMF warns that elevated tariffs and fragile geopolitics still pose major threats to global financial stability.
Clients are understandably spooked. But more importantly, many don’t fully grasp what this volatility means, or how their portfolios are built to weather it.
That makes clarity around investment risk not just helpful, but essential. Under FCA Consumer Duty, advisers must ensure that clients not only receive information, but also understand it. Now, more than ever, you need to demonstrate that your communications are clear, personalised, and aligned with good outcomes.
Why Clarity Around Risk Matters
In June 2024, a study by Opinium and Abrdn revealed that around 40% of UK adults have low financial literacy, with just 20% answering all key financial questions correctly, and another 20% answering none correctly. This highlights a significant barrier to understanding even the basics of investment risk, asset allocation, and diversification.
Separately, a Savanta survey of 500 high-net-worth investors in May–June 2024 found that only 84% felt communications from their wealth managers were clear and effective, leaving a notable proportion of clients underserved when it comes to explanation and engagement.
These findings reinforce the FCA’s expectations under Consumer Duty: that firms must go beyond disclosure and actively evidence client understanding. In other words, good intentions aren’t enough, communications must land clearly and support better outcomes.
6 FCA-Conscious AI Prompts for Clearer Risk Conversations
The second in our AI for Advisers series looks at six practical AI prompt suggestions that can help you demonstrate how investment risk, volatility, diversification and asset allocation work in a way that clients can genuinely understand. Each one is designed to support Consumer Duty requirements by making complex topics clearer, more relatable, and easier to evidence through personalised or visual communication.
1. Visualise Volatility
Prompt:
“Create a simple line chart showing two hypothetical investment journeys - one smooth and one volatile - with the same average return over time.”
Why use it?
Helps clients see that temporary dips don’t always mean long-term damage - critical in volatile periods like now. Aligns with FCA expectations to promote understanding, not just disclosure.
2. Explain Diversification with Analogy
Prompt:
“Explain diversification using a relatable analogy, like cooking or football, in plain English suitable for a client with no investment background.”
Why use it?
Analogies help you cut through jargon. They’re especially useful when volatility prompts questions like: “Why do I own this again?”
3. Summarise Risk Profiles in Plain English
Prompt:
“Write a short, client-friendly description of a balanced risk profile, with an example of how it might look in a real-life portfolio.”
Why use it?
Useful for annual reviews or onboarding. Helps demonstrate that your advice is understood, documented, and tailored.
4. Show the Risk/Reward Trade-Off Visually
Prompt:
“Design a visual that compares potential returns and potential losses across low, medium, and high-risk investment options.”
Why use it?
Encourages rational decision-making during uncertain markets. Reinforces the suitability process and helps prevent emotional missteps.
5. Compare Investment Types by Risk Level
Prompt:
“Create a chart or table that ranks different investment types (cash, gilts, equities, property, etc.) by general risk level and return potential.”
Why use it?
Gives clients a clearer view of asset allocation and helps support conversations around rebalancing or reviewing during periods of change.
6. Tailor Risk Communication to Client Personality
Prompt:
“Write two versions of the same explanation of investment risk - one for an analytical client, one for a client who prefers emotional reassurance.”
Why use it?
Behavioural research shows that when risk is communicated in a way that matches client personality, it improves trust and decision-making which supports Consumer Duty goals of personalisation and good outcomes.
Compliance Reminder: Check, Check, and Triple Check
While AI tools can enhance your messaging, you must still:
- Cross-check all facts
- Ensure tone and output align with your advice process
- Avoid over-promising or inappropriate assumptions
AI should support your advice - not replace professional judgment.
In Summary
Market turbulence is making clients feel exposed. And the FCA is watching to see that you don’t just hand clients a risk report, you help them understand it.
These AI prompts won’t write your suitability letters for you. But they can help you explain, illustrate, and personalise key messages in a way that builds confidence and satisfies your regulatory obligations.
Sarah Paul
Chief Operating Officer
Panacea Adviser
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