SEI Wealth Platform’s managing director has joined a growing number of industry figures who say regulatory uncertainty is hampering fintech developments.
Brett Williams said there is uncertainty surrounding regulation, particularly when it comes to advice definitions.
He said: “It has been an issue that has been ongoing and it is an issue for the industry as a whole.
“If you ask the man or woman in the street what advice is, I think it would be different from what the regulator thinks it is. We are over-complicating it to some extent.”
Regulation is slowing down some of the decision making around the financial sector’s use of technology, he said.
“We have started to hear people saying that now Mifid II has been delayed they feel more able to make some decisions but we are not really clear what that delay actually means,” he said.
Central to the industry’s focus on fintech is interest in automated, or robo, advice tools and services.
Several firms have said they are considering launching into the robo-space. In February Selectapension announced it was planning to launch a robo-advice proposition in the third quarter of this year. Bellpenny has also said it is planning a robo-advice service next quarter.
But several figures in the fintech world have raised concerns about regulation, including Nick Hungerford, the founder of Nutmeg, who said the industry needed to “update its vocabulary to fit with the real world”.
Ben Goss, the chief executive of Distribution Technology, has said several of his firm’s clients have halted their attempts to move into fintech because of regulatory uncertainty.
This month the Financial Services Consumer Panel reported regulatory and common definitions of advice do not coincide, confusing consumers.
Under its Project Innovate the FCA aims to help firms meet approval for new financial products and services. As of January it had supported 177 businesses with their ideas.
In November, the FCA announced it was looking into creating a regulatory sandbox, with support from HM Treasury, to allow businesses to test their ideas without danger of enforcement action and without putting consumers at risk.
