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More need for robo-regulator than adviser

More need for robo-regulator than adviser

Instead of developing robo advice, the industry should have a robo-regulator who can “give straight answers” instead of deciding legislation in hindsight.

According to Robin Ellison, head of strategic development for pensions at City law firm Pinsent Masons, there was a strong argument for dropping regulators altogether and creating “other mechanisms for protecting customers”.

Mr Ellison told the London delegation at the FTAdviser Retirement Freedoms Forum on 29 September that at least a “robo-regulator would give the industry a straight answer now rather than deciding things in hindsight”.

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He added: “The regulatory framework must be fundamentally re-thought. It is expensive and produces profound unintended consequences.”

Maggie Craig, head of pension policy in the strategy and competition division of the FCA, did not respond specifically to Mr Ellison’s comments, but said the FCA was working to achieve the right balance.

For example, she said the FCA could not give one straight answer on the matter of insistent clients, adding: “Some want us to be more prescriptive, others want no interference whatsoever.

“We do not want to create a tick-box mentality. Advisers are meeting individuals, so it would be harmful to make those interactions too robotic.”

Industry view

Keith Richards, who is chief executive of the Personal Finance Society, also spoke at the conference, warning advisers that facilitating requests from ‘insistent clients’ could cost them when they renewed their professional indemnity insurance cover.

He said: “We have alterted the regulator to the fact the three-step guidance on insistent clients is not actually in the Conduct of Business handbook, and the FCA has not confirmed how liability for advice given to clients insistent on transferring their defined benefit pension pots will be treated in the future.”