Broker advice letters and AI confidentiality: what retail client advice gives away in ChatGPT or Claude.

When a broker gives personal advice to a retail client, the advice is documented in an advice letter or, where the Act requires one, a Statement of Advice. For motor, home building and home contents cover the Corporations Act does not require a Statement of Advice if the client is given the broker’s remuneration and associations information instead. Either way, the client’s whole domestic situation goes into the document: the home, its contents, an investment property, the cars, the family, the prior claims and the recommendation. Advice letters are template-heavy and slow, which is why they get drafted in ChatGPT or Claude. This page marks every item in a retail advice letter that the Code of Practice, the Corporations Act and the Privacy Act bear on, and shows how the same letter is drafted on Ermos inside the brokerage.

The personal advice letter

Prepared when personal advice is given to a retail client. Section 946A of the Corporations Act generally requires a Statement of Advice for that, but regulation 7.7.10 lifts the requirement for motor vehicle, home building and home contents insurance, in which case section 946B(6) requires the client to be given the remuneration and conflicts information instead. The letter carries the remuneration disclosure the Code of Practice requires for retail clients.

Statement of Advice
Prepared for Lena and Giuseppe Marchetti¹ by Priya Desai, Pacific Harbour Insurance Brokers, AFSL 123456⁸ · 27 October 2026

Your situation. You own and live at 8 Carrington Avenue, Mosman (rebuild value $1.9m, contents $240,000 including jewellery of $38,000 and a cellar valued at $22,000). You own an investment unit at 4/15 Spit Road, Mosman, leased at $980 per week. Vehicles: 2024 Range Rover, 2021 Toyota Corolla.²

Your circumstances. Giuseppe, 81, has early-stage dementia and no longer drives; Lena holds his enduring power of attorney. Giuseppe’s name remains on the titles. Lena has asked that correspondence come to her.³

Claims history. Home: storm damage 2024 ($19,000, paid). Motor: Lena, at-fault collision 2025, $11,400. The 2025 claim was initially disputed by the insurer over the police report; resolved.⁴

Our recommendation. Home and contents with Anchor, sum insured increased to $1.9m rebuild (currently $1.4m, underinsured); specified jewellery and cellar. Landlord policy with Meridian, including loss of rent. Motor with Southern Cross, comprehensive, Lena as sole driver on both vehicles given Giuseppe’s circumstances.⁵

Why. The rebuild shortfall is the largest risk you carry. The jewellery and cellar exceed standard sub-limits. Removing Giuseppe as a driver reduces premium and avoids a disclosure question about his diagnosis.⁶

Our remuneration. Commission of $2,140 across the three policies, paid by the insurers, and a broker fee of $220.⁷

Priya Desai⁸

An invented letter. Hover or tap any highlighted item for the analysis; the full list is below.

What leaves the brokerage

The clients

Two named individuals. Privacy Act guide.

Frontier Models (ChatGPT, Claude)	Transmitted to the provider, generally offshore on personal plans
Ermos Edge	Stays on your instance in Australia; leaves only inside a permitted excerpt, per question, to the named provider
Ermos Dominion	Stays on the unit in your office

Homes, contents, valuables and vehicles

Two addresses, a rebuild value, jewellery and a cellar with values, a rent and two cars. Financial information, and a shopping list. Privacy Act guide.

Frontier Models (ChatGPT, Claude)	Addresses and valuables transmitted
Ermos Edge	Stays on your instance in Australia; leaves only inside a permitted excerpt, per question, to the named provider
Ermos Dominion	Stays on the unit in your office

A dementia diagnosis and a power of attorney

Health information about an 81-year-old, and who holds his authority. Sensitive information about a vulnerable person, which section 10 of the Code of Practice also asks subscribers to handle with care. Patient data guide.

Frontier Models (ChatGPT, Claude)	A dementia diagnosis transmitted; on consumer tiers it can train future models
Ermos Edge	Stays on your instance in Australia; leaves only inside a permitted excerpt, per question, to the named provider
Ermos Dominion	Stays on the unit in your office

Claims history, including a disputed one

Two claims, one initially disputed over a police report. Insurance history that follows a client.

Frontier Models (ChatGPT, Claude)	A disputed claim transmitted
Ermos Edge	Stays on your instance in Australia; leaves only inside a permitted excerpt, per question, to the named provider
Ermos Dominion	Stays on the unit in your office

The recommendation

The advice, including removing a named person as a driver. Advice, and a decision about an individual’s capacity in all but name.

Frontier Models (ChatGPT, Claude)	The advice transmitted
Ermos Edge	Stays on your instance in Australia; leaves only inside a permitted excerpt, per question, to the named provider
Ermos Dominion	Stays on the unit in your office

The reasons

Why the advice is in the clients’ interests, including a comment on the husband’s driving. The broker’s judgement about a vulnerable client. Patient data guide.

Frontier Models (ChatGPT, Claude)	Your judgement about a vulnerable client transmitted
Ermos Edge	Stays on your instance in Australia; leaves only inside a permitted excerpt, per question, to the named provider
Ermos Dominion	Stays on the unit in your office

Remuneration

What the brokerage earns. Disclosed to the client as section 6.1 of the Code of Practice requires.

Frontier Models (ChatGPT, Claude)	Remuneration transmitted
Ermos Edge	Stays on your instance in Australia; leaves only inside a permitted excerpt, per question, to the named provider
Ermos Dominion	Stays on the unit in your office

The broker

Ties the advice to a named broker and the licensee responsible.

Frontier Models (ChatGPT, Claude)	Transmitted, and the leak is traceable to you
Ermos Edge	Stays on your instance in Australia; leaves only inside a permitted excerpt, per question, to the named provider
Ermos Dominion	Stays on the unit in your office

What happens in Frontier Models (ChatGPT, Claude)

The whole document 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, under that country’s legal process. Some business plans offer storage in Australia, but the provider still receives the content.
On consumer tiers, prompts can be retained and used to train future models.
The provider’s staff and systems can reach the content under the provider’s own policies.
Once sent, the brokerage no longer controls it. Retention and deletion happen on the provider’s terms.

The same document on Ermos

Ermos Dominion

The document is drafted on a unit in your office, from your own templates and the client file. Every marked item stays on the unit, which keeps working with the internet switched off. Nothing in it is transmitted to an AI provider, so there is no disclosure to analyse: the confidentiality work is the same as for your file server.

Ermos Edge

Your documents, the index and your access boundaries stay on your own instance in an Australian data centre. When a staff member asks for this draft, only their question and the excerpts they are permitted to see go to a named Australian provider, who is contractually barred from keeping the content or training any model on it. Nothing is processed outside Australia.

	Frontier Models (ChatGPT, Claude)	Ermos Edge	Ermos Dominion
Where the document is processed	Provider servers, generally offshore on personal plans	Your instance in an Australian data centre; answers generated in Australia	The unit in your office
Who can read it	Provider staff and systems, under policy	Your staff, within the boundaries you set. The named Australian provider processes only permitted excerpts, under contract, and keeps nothing	Your staff only
Is it kept	On the provider’s terms	Kept on your instance; the provider is barred from retaining it	Stays on the unit
Can it train a model	On consumer tiers, yes	No, by contract	Only your own unit learns from it, on your hardware

Part of AI data leakage in insurance brokerages. See how this works in practice: Advice letters on Ermos.

Common questions

Do ChatGPT and Claude use the information in a personal advice letter?

Both receive the whole letter on the AI company's servers once it is pasted. 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. A personal advice letter combines a household's addresses, an 81-year-old's dementia diagnosis and the power of attorney.

Can we use ChatGPT or Claude for a personal advice letter if we remove the clients' names?

No, because the rest of a personal advice letter still describes one household in detail. Removing names rarely makes a document anonymous. Information stays personal information while the person is reasonably identifiable, and the OAIC warns that information can be at risk of re-identification even when it has been de-identified or anonymised. A couple with an investment unit, specified jewellery, a valued cellar and a husband who no longer drives is recognisable to anyone who knows the family. 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.

Does deleting the chat remove a personal advice letter from ChatGPT or Claude?

Not immediately. Deleting a chat removes it from the user's history, but OpenAI and Anthropic each say they can keep a deleted chat on their systems for up to 30 days, and longer where safety or legal obligations apply (OpenAI, Anthropic). Both products also have memory features that can carry details from one conversation into later ones, and on a personal account each user decides whether they are switched on (ChatGPT, Claude). A personal advice letter holds an 81-year-old's dementia diagnosis and the advice to remove him as a driver, so a brokerage has to decide beforehand whether either should go into an AI tool at all.

How can a brokerage use AI for a personal advice letter without sending it to ChatGPT or Claude?

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. The letter is drafted from the needs analysis, the policy schedules and the brokerage's own template. The broker checks the sums insured against the valuations the draft cites before signing and sending it.

Does the Code of Practice treat vulnerable clients differently?

Section 10 commits subscribers to identify and support clients experiencing vulnerability. An advice letter that records a client's dementia and the arrangements around it is the brokerage meeting that commitment. The same letter on a frontier model provider's servers is the vulnerability, disclosed.

Is a broker's SOA the same as a financial adviser's?

It comes from the same part of the Corporations Act, with one difference. Personal advice to a retail client generally calls for a Statement of Advice, but for motor vehicle, home building, home contents and certain other general insurance products the Corporations Act and Regulations lift that requirement if the client is instead given the remuneration and interests information the Statement would have held. The Corporations Act requires that remuneration disclosure either way, and the Insurance Brokers Code of Practice adds detail, such as whether any commission is kept if the policy is cancelled. The content is insurance rather than investments, and the confidentiality question is identical.

How is a retail advice letter drafted on Ermos?

From the needs analysis, the policy schedules and the brokerage's template, on your own unit. The broker checks the sums insured against the valuations the draft cites, and sends it. The clients' homes, valuables and health never leave the brokerage.

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