IA response to the Mills Review

Commenting on the Mills Review, John Allan, Director of Innovation & Operations Unit and Engine at the Investment Association, said: "The Mills Review comes at a pivotal moment. Artificial intelligence has the potential to fundamentally change how investment services are designed and delivered to retail investors over the next decade.

"Combined with innovations such as tokenisation and distributed ledger infrastructure, AI could significantly reshape the investment value chain - from research and portfolio construction to fund operations and client engagement - unlocking new levels of efficiency and access for UK savers.

"If the UK gets this right, it can position itself at the forefront of a new generation of data-driven, digitally enabled investment services that deliver better outcomes for consumers while strengthening the global competitiveness of our industry.

"Realising this opportunity will require regulatory frameworks that evolve in step with technological change - maintaining strong accountability and consumer protection, while enabling firms to innovate, adopt and scale responsibly as AI capabilities rapidly advance."

Executive summary from the IA response:

• Investment managers' operating models will need to evolve, moving from periodic, manual assurance of models towards continuous oversight of AI-driven decision-making across both human- and agent-in-the-loop investment processes.

• AI is already beginning to disrupt traditional investment research, with agentic tools supplementing or replacing some third-party research functions and changing how investment insight is generated and consumed by portfolio managers.

• The combination of AI and distributed ledger technology could modernise fund infrastructure, enabling more automated governance, enhanced transparency, improved compliance and more efficient fund transactions within the investment value chain.

• Maintaining accountability within investment management is critical, particularly under the Senior Managers and Certification Regime, as firms rely more heavily on third-party AI providers and externally managed models while remaining responsible for investment outcomes and consumer protection.

• The UK's principles-based, pro-innovation regulatory approach is a competitive strength, but a continuous collaboration between regulators and industry will be critical to support innovation, competitiveness and good consumer outcomes as AI adoption accelerates.

• The IA Engine enables FinTech innovators with AI models, platforms and specific use cases in the investment space to work alongside industry to continue developing world-leading products and services that drive better investment and outcomes for UK consumers.