FCA to launch consultation on automated advice

The chief executive of the FCA said high-net worth people were already being given good advice, and the lowest end of the market were receiving the guidance they needed, but the mass middle of people who needed to save for retirement but could not afford to pay for advice in a fully disclosed cost environment.

Therefore, Mr Wheatley said there had to be some solution from technology to meet their needs.

Speaking today (29 May) at Bloomberg’s headquarters in Finsbury Square, London, Mr Wheatley said: “We get feedback from advisers all the time saying that automated and online services, such as web-based advice, could not be used because of the fear of straying from guidance into advice.

“But the consultation paper will aim to address that.”

He said the paper would aim to do three things, namely to include the feedback from customers about advice, publish guidance to offer greater clarity to firms on how to deliver simplified and automated advice, and ask the industry to see whether there needs to be more “sweeping change” to the rules on how automated advice is delivered.

Mr Wheatley said this was not going to be “a charter” or a set of rules, but a means to help meet the advisory needs of the mass market through low-cost technology solutions.

He added: “I would question and challenge those firms who tell me they cannot use computers to fit in with face-to-face advice, when there are things they can use such as learning algorithms, and computers are now capable of feats it would have been impossible to imagine just years ago.”