AI data leakage in financial advice: what leaves when client files go into ChatGPT or Claude.

A financial adviser holds more of a client’s life on file than almost any other professional: income, debts, superannuation, insurance, health, family, and what the client is afraid of. Standard 8 of the Code of Ethics requires those records to be complete and accurate, and the Privacy Act treats all of their content as personal information, with the health detail treated as sensitive information. This series takes seventeen documents an advice practice produces every week, from the fact find to the complaint response, marks every item the practice is obliged to protect, and shows where each one goes when the document is pasted into ChatGPT or Claude. Each page ends with the same document on Ermos, inside the practice.

The documents, one at a time

Report or memoThe Statement of Advice

Position, goals, health, the recommendation and the fees. The whole client, in the document the law requires.

See what leaves → FormThe fact find

Identity, tax file numbers, every account and debt, the children, the health history and the estate wishes. Everything, on one form.

See what leaves → NotesThe file note of a client meeting

A redundancy nobody knows about, a health change, a family conflict and the adviser’s impressions. What the client said before it became advice.

See what leaves → RecordThe Record of Advice

A change in circumstances, the holdings, the adjusted recommendation and the reasons, written quickly between meetings.

See what leaves → LetterThe annual review letter

Balances, performance, fees, what changed and what comes next. A year of a client’s financial life, in a letter written to be warm.

See what leaves → EmailThe client email during a market fall

Holdings, the loss, the advice to hold, and what the client did last time. Written fast, to be calm.

See what leaves → EmailThe email to the insurer

Diagnosis, medication, the specialist, the dates, the occupation and the sum insured. The most medical email an adviser writes.

See what leaves → Report or memoThe superannuation consolidation advice

Member numbers, balances, the insurance that lapses, a tax file number and the comparison. The rollover form’s worth of identifiers, in one advice.

See what leaves → NotesThe estate and aged care planning note

A parent’s care needs and assets, the wills, the beneficiaries and the family disagreement. Three generations, in one note.

See what leaves → LetterThe complaint response

The allegation, the advice history, the file notes relied on, the licensee’s position and the offer, in a letter AFCA may read next.

See what leaves → Statement or scheduleThe ongoing fee consent

The clients, the fee, the super account it comes out of, what the practice did for it and the commission. The annual consent, with the numbers filled in.

See what leaves → SpreadsheetThe retirement projection spreadsheet

Ages, balances to the dollar, a redundancy, a health scenario, the drawdown and the Age Pension estimate. A couple’s future, in a grid.

See what leaves → SpreadsheetThe client list export

Every client in one grid: dates of birth, tax file number digits, the fee, the risk profile and what the adviser wrote about each of them.

See what leaves → EmailThe death notification email

The illness, the policy number and sum insured, the widow, the executor and the account for payment. Written in the first week of a family’s grief.

See what leaves → EmailThe lapsed policy reinstatement email

The lapse, the money trouble behind it, the surgery and tablets since, the income and the adviser’s frank view of what the client must disclose.

See what leaves → FormThe AML/CTF client identification record

Licence and passport numbers, the verification result, source of funds and the risk rating. The record that proves who the client is.

See what leaves → TranscriptThe client meeting transcript

A mother’s diagnosis, a redundancy nobody knows about, a health scare, a row about a will and a request to stop recording. Every word of an hour and twenty minutes.

See what leaves →

How the leakage happens

The mechanism is the same for every document. The whole text is transmitted to the provider’s servers. On personal plans the user cannot choose where it is stored or processed, and for the major providers that has generally meant outside Australia. On consumer tiers it can be retained and used to train future models. The provider’s staff and systems can reach it under the provider’s own policies. Once sent, the practice no longer controls it. Our on-premise vs cloud comparison sets out the four ways to run AI and where each one puts your documents.

The obligations in play

Each marked item on these pages links to the guide that covers its obligation:

The same documents on Ermos

Ermos Dominion drafts and searches on a unit in your office, so the documents never leave it. Ermos Edge keeps your documents on your own instance in an Australian data centre and sends only permitted excerpts, per question, to a named Australian provider. Every page in this series ends with both, item by item.

Common questions

Can financial advisers use ChatGPT or Claude with client information?
Advisers stay bound by the Code of Ethics, the Corporations Act and the Privacy Act when client information goes into ChatGPT or Claude. The Office of the Australian Information Commissioner (OAIC) recommends in its guidance on commercially available AI products that organisations do not enter personal information, and particularly sensitive information, into publicly available generative AI tools, because of the significant and complex privacy risks. Sending a client's document to a third party the client never agreed to raises a question under Standards 2, 4 and 8 before the Privacy Act is even reached. Health information is sensitive information under the Privacy Act, and disclosure to a recipient overseas engages APP 8.
Do ChatGPT and Claude train on what staff paste in?
As at October 2026, whether a conversation on a personal plan (ChatGPT Free, Plus or Pro; Claude Free, Pro or Max) can be used to train the models depends on a setting each user controls. Business plans (ChatGPT Business and Enterprise, Claude Team and Enterprise) and the developer APIs sit under commercial terms, and OpenAI and Anthropic each say they do not train on that content by default (OpenAI, Anthropic). On either product, the thumbs up and thumbs down buttons can send a whole conversation back for training. For an advice practice, a single paste can carry a client's health history, tax file numbers and a household's confidences.
Do business plans such as ChatGPT Business or Claude Team solve the problem for financial advisers?
Only in part. A business plan changes the default on training, and the content still goes to the AI company. On a personal plan the user cannot choose where conversations are stored or processed. Some business plans let an organisation choose to store data at rest in Australia (OpenAI), which still leaves the content with the AI company. The OAIC's guidance also tells organisations to review carefully the terms and settings that will apply to their use of any AI product. For an advice practice, a Statement of Advice or a fact find would arrive there in full. Our comparisons with ChatGPT Enterprise and Claude weigh the trade-offs.
What is the safest way for an advice practice to use AI with client documents?
Ermos is built so the document stays under your control. On the Dominion AI unit it is drafted inside your office and none of it is sent to an AI provider. On Ermos Edge your documents and index stay on your own instance in an Australian data centre, and only the question and the excerpts the user is permitted to see go to a named Australian provider that is contractually barred from keeping them or training any model on them. For financial advisers, staying in control means the client file stays where the practice can see it, correct it and answer for it.
What is AI data leakage in a financial advice practice?
Client information leaving the practice's control through an AI tool. When a document is pasted into ChatGPT or Claude it is transmitted to the provider's servers, can be retained on the provider's terms, can be used to train future models on consumer tiers, and can be reached by the provider's staff and systems. For an adviser the leaked information is a client's financial position, often their health, and the practice's own advice.
Which advice documents carry the most risk?
The fact find, because it carries identity, tax file numbers, health and financial detail on one form; the email to the insurer, because it is the most medical document an adviser writes; the Statement of Advice, because it carries the whole position and the recommendation; and file notes, because they record what clients say in confidence. The pages in this series take each one in turn.
Does the Code of Ethics say anything about AI?
Not by name. Standard 8 requires complete and accurate client records, Standard 2 requires integrity and the client's best interests, and Standard 4 requires the client's free, prior and informed consent to the adviser acting for them. A document sent to a third party the client never agreed to is a question under all three, before the Privacy Act is reached.

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