AI Use and Risk Disclosure by Investment Advisers (OpenAlex (recherche mondiale))

Summary

• Researchers drew a stratified random sample of 400 SEC-registered investment advisers from a population frame of 16,223 active firms.p.1
• Analysis of 388 retrieved Form ADV Part 2A brochures revealed that 23.7% disclosed AI use, while 27.6% contained AI-related risk language.p.1
• Disclosure rates grew significantly alongside firm size, increasing from 10.4% in the smallest AUM quartile to 43.8% in the largest AUM quartile.p.1
• In March 2024, SEC settled enforcement actions against Delphia (USA) Inc. and Global Predictions Inc., assessing civil penalties of US$225,000 and US$175,000, respectively.p.3
• Excluding named-vendor references from the composite classification reduced overall brochure AI use prevalence to 22.4%.p.7
• Across 283 matched firms, AI use was disclosed in 23.0% of brochures compared to 5.7% of current principal-site marketing materials.p.9

Key insights

1. Form ADV Part 2A brochures include AI-related risk language more frequently than affirmative AI use disclosures.p.7
2. Disclosed AI usage exhibits a strong positive gradient across 2024 AUM quartiles for both private-fund advisers and wealth/retail advisers.p.8
3. Controlling for AUM quartile, private-fund advisers remain significantly more likely to disclose AI use than wealth and retail advisers.p.8
4. The observed 17.3-percentage-point disclosure gap between brochures and websites disappears after accounting for document length.p.9
5. Applying an enforcement-anchored textual screen to 388 brochures yielded 5 flags, none of which constituted unsubstantiated promotional claims.p.12
6. A literal keyword search for the phrase artificial intelligence misses or mislabels approximately one-quarter of actual disclosure cases.p.1