When AI meets client consent: Navigating recording opt-outs without losing productivity

"All the AI stuff left the room."

That's how one adviser described what happened when a client working in defence contracting declined to have their meeting recorded. No AI notetaker. No automated transcription. No structured data feeding into reports.

Just the adviser, a pen, a notepad, and two additional hours of manual work trying to recreate what was discussed.

During AdvisoryAI's recent industry panel, this real-world scenario sparked an unexpectedly nuanced debate. Not about whether AI is useful, every hand in the room shot up when asked who uses a notetaker, but about what happens when a client says no.

Not out of paranoia. Not because they're technophobic. But because they work in sensitive industries, hold cultural reservations, or simply exercise their right to refuse.

The question advisers are now wrestling with: can you still serve these clients efficiently under Consumer Duty and rising cost pressures? And if the answer is no, what then?

The compliance reality: Recording is optional, documentation isn't

Here's the uncomfortable truth: while clients can refuse to be recorded, advisers cannot refuse to document meetings thoroughly.

The FCA's Consumer Duty and existing record-keeping obligations already make detailed documentation non-negotiable. MiFID II regulations require firms to record all communications relating to orders and trading, across phone calls, emails, video meetings, and even face-to-face conversations.

Recording meetings via AI is simply one method of meeting those obligations. A highly efficient method, but still just one option among several.

As compliance expert Elemi Atigolo points out in FT Adviser: "Firms need to map the entire journey of data, from recording, to transcription, to AI processing, to report generation. If an adviser doesn't know where a client's voice ends up, how can they meet that standard?"

This raises the regulatory baseline: advisers must keep accurate records whether clients consent to recording or not. The challenge becomes: how do you maintain compliance quality when you cannot use the tools that make compliance efficient?

The hidden costs when clients decline recording

Let's be precise about what happens when AI note-taking exits the room.

The audience member at the AdvisoryAI panel who dealt with the defence-industry client reported that follow-up work "took two hours longer." That's not an exaggeration. It's the operational reality advisers face when reverting to manual processes.

Without AI recording and transcription:

Admin multiplies: What normally takes 30 minutes for post-meeting admin stretches to 2-3 hours as advisers reconstruct conversations from handwritten notes, update CRMs manually, and draft meeting summaries from memory.

Accuracy deteriorates: Human recall is imperfect. Critical details get lost. Client statements get paraphrased rather than captured verbatim. Compliance exposure increases when meeting records become interpretations rather than records.

Workflow bottlenecks compound: Paraplanners receive incomplete or poorly structured information, leading to back-and-forth clarifications that delay report production. The entire advice process slows.

Cost implications ripple outward: Manual processes require more billable hours. Either the adviser absorbs those costs (reducing profitability) or passes them to clients (increasing fees). Neither option is sustainable at scale.

During the panel, Helen Lovett of Foster Denovo raised what many were thinking: "It's going to make everything, including the servicing, longer all the way down the line. Can we charge more for clients opting out?"

Her question wasn't rhetorical. It addressed a real tension in how Consumer Duty expects firms to operate: advisers cannot reasonably cross-subsidise inefficiency. If one client's preference creates a disproportionate administrative burden, who bears that cost?

The transparency dilemma: Consent vs. consequence

Here's where the ethical complexity deepens.

Advisers face two competing obligations:

1. The client's right to decline recording

2. The adviser's duty to deliver fair, efficient, and compliant service to all clients

As FT Adviser reported, some firms are already discussing levying admin fees on clients who refuse AI note-taking. Not as punishment, but as transparency about the true cost of manual compliance.

Wayne Griffiths of One Financial Solutions offered a pragmatic perspective at the panel: "It's not the client we want if they're not onboard with our system."

That statement might sound harsh, but it reflects operational reality. Firms build their workflows around specific tools and processes. When individual clients require bespoke accommodations that fundamentally disrupt those workflows, it creates genuine business challenges.

The question becomes: should advisers be required to serve clients whose preferences make service delivery economically unviable?

Consumer Duty demands fair value and good outcomes, but it also assumes operational efficiency. If a client's choice to refuse recording triples the administrative cost of servicing their account, fair value calculations become complicated.

Helen Lovett added a wry observation that cut through the tension: "Is it more secure to write on some paper then leave it on the bus than be recorded somewhere?"

Her point wasn't flippant. Manual note-taking introduces its own risks. Physical documents can be lost, misplaced, or accessed by unauthorised parties. The security concerns clients cite when refusing digital recording often apply equally or more severely to paper-based alternatives.

What the law actually says about recording and consent

The regulatory position on AI note-taking isn't as clear-cut as many assume.

In the UK, the FCA doesn't mandate AI note-taking. It mandates thorough documentation. How firms achieve that documentation is largely discretionary, provided they meet Consumer Duty requirements and maintain audit-ready records.

However, GDPR and data protection regulations do require informed consent when processing personal data through AI systems. This is where many firms stumble.

A pop-up notification that says "this meeting is being recorded" is insufficient. Clients need to understand:

• What happens to the recording after the meeting ends

• Which systems process the data (transcription services, AI analysis tools, report generation platforms)

• Where data is stored and for how long

• Whether data might be used for model training or other purposes

• Who has access to the recordings and transcripts

As compliance expert Rhett Das notes: "A pop-up on a screen to say a meeting is being recorded is not sufficient consent. Advisers need to explicitly get client consent if they're using AI in their business."

This creates what Atigolo calls "the AI consent gap", the space between what clients believe they're agreeing to and what that consent actually enables.

Firms that cannot clearly explain their AI pipeline may find themselves unprepared when serious questions arise during FCA examinations or client disputes.

Real adviser perspectives: From mandatory adoption to practical workarounds

The panel discussion revealed a spectrum of approaches firms are taking.

Helen Lovett (Foster Denovo) announced that AI note-taking is becoming mandatory across their firm: "We very rarely use that word at Foster Denovo; compliance is mandatory, obviously, but we generally allow people quite a bit of freedom. We are now making it mandatory, and the whole advice process will be washed with AI."

This doesn't mean Foster Denovo refuses clients who decline recording. It means their standard operating procedure assumes recording will occur, and exceptions require alternative accommodations.

Wayne Griffiths (One Financial Solutions) emphasised the business rationale: "The customer experience has improved, the quality of work has improved, and actually the cost of giving advice has dropped. If you can drive down the cost of giving advice, we can start looking after clients who are lower-end."

For Griffiths, AI note-taking isn't about adviser convenience; it's about making advice accessible to more people by reducing operational costs.

Gareth Highton (Finli) described his firm's evolution from tactical AI adoption (solving specific pain points) to strategic process redesign: "We're now at the point of comfort where we have a better idea of where this is going. We're looking at how to design a process where technology and AI support every team member to deliver a better outcome and a better service to clients."

What emerged from the discussion was a pattern: firms that have deeply integrated AI note-taking into their workflows find it increasingly difficult to operate without it, not because advisers are lazy, but because every other system in the firm now depends on structured, AI-processed meeting data.

CRM updates, report generation, compliance checks, and client communications, all of these downstream processes work more efficiently when meetings are recorded and transcribed.

When that recording doesn't happen, the entire system experiences friction.

Practical solutions: How to handle client opt-outs

So what should advisers actually do when a client declines recording?

1. Offer genuine transparency before the meeting

Don't just ask "Can I record this?" Explain:

• Why recording improves accuracy and reduces errors

• What systems the recording touches

• Where data is stored and who accesses it

• What happens if they decline

Provide this information in writing ahead of the meeting so clients can make informed decisions without pressure.

2. Make opt-outs a real choice, not a trade-off

Clients should be able to decline recording without being penalised or made to feel difficult. However, transparency about consequences is not penalisation, it's honesty.

If opting out means:

• Longer turnaround times for reports

• Potential for additional clarification meetings

• Possible admin fees to cover manual processing

Clients deserve to know this upfront.

3. Document your alternative process

If clients decline recording, you still need compliant documentation. Establish a clear protocol:

During the meeting:

• Take detailed handwritten or typed notes

• Capture client statements as close to verbatim as possible

• Note key decisions, risk assessments, and recommendations explicitly

Immediately after the meeting:

• Dictate a voice memo summarising the discussion (Gareth Highton's workaround: "Dictate your recap")

• Transfer notes into your CRM while details are fresh

• Send the client a written summary for confirmation within 24 hours

For compliance:

• File all meeting documentation in client records

• Flag the file to indicate manual documentation was used

• Conduct additional quality reviews before finalising advice

4. Consider structured admin fees

If manual processing genuinely costs more, build that into your fee structure transparently. Don't present it as a punishment. Frame it as cost-recovery for bespoke service delivery.

Some firms already differentiate pricing based on service models. Clients who require fully manual processes are effectively requesting a different service tier.

5. Audit your technology vendors regularly

Many clients refuse to record because they distrust where their data goes. Fair enough! So can you confidently explain your data flow?

Review your AI vendors' privacy policies, data retention practices, and security measures. Ensure:

• Data isn't used for model training without explicit consent

• Storage complies with UK GDPR requirements

• Systems use proper encryption (256-bit minimum)

• Data residency meets regulatory standards

Wayne Griffiths emphasised this at the panel: "The data is the most valuable thing here, and you are not spending on a person's role to make sure that it is secure. It's mad."

He went on to suggest that firms need dedicated technical expertise: "You need a tech guy."

Ready to implement AI note-taking the right way? 

AdvisoryAI provides Evie (meeting capture and admin), Emma (report generation), and Colin (compliance checking) in a secure, FCA-aligned suite designed specifically for UK financial advisers. Our AI employees work with your processes, not against them, and we'll help you build the transparency frameworks clients deserve.

With AdvisoryAI’s built-in data encryption and FCA-aligned safety standards, you can confidently address client concerns about recordings and privacy. It’s how you convey transparency, earn trust, and bring clients on board for an AI-powered advice journey.

Book a demo to see how AdvisoryAI handles consent, compliance, and client trust.