What is a system prompt?

Definition

A system prompt is a set of instructions the AI sees before every conversation, usually hidden from the person typing. Vendors use it to set the tool's behavior; many chat assistants let a firm or user add their own version, often called custom instructions.

It's how a website chatbot knows to stay on topic, or how a firm's internal assistant knows to write in the firm's style.

Why it matters for advisors

For client-facing AI, the system prompt is part of your compliance control. A website chatbot's instructions should keep it from giving individualized advice, making performance claims or collecting sensitive data. Your CCO should see and approve them.

For internal tools, firm-level instructions are an easy way to build in guardrails: always use plain English, never invent figures, say when you're unsure.

If your firm builds its own assistant or custom GPT, the system prompt is where you set firm rules, like "never give tax advice" or "always remind the user to check figures." Write it down, version it and have compliance review it like any other procedure.

Example

Before launching a website chatbot, the firm's CCO reviews its standing instructions and adds a line telling it to direct any account-specific question to a phone number rather than answer it.

Watch out for

System prompts reduce risk but don't eliminate it. Users can sometimes talk a tool out of its instructions, which is called prompt injection or jailbreaking.