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Goss: FAMR will make digital advice norm in 3 years

Goss: FAMR will make digital advice norm in 3 years

Digitally supported financial advice will be the norm within three years if the Financial Advice Market Review recommendations are delivered, Ben Goss has said.

The chief executive of Distribution Technology said HM Treasury and the Financial Conduct Authority appear intent on addressing the barriers that prevent serious application of technology to the advice and suitability process.

“If they deliver on their recommendations, the industry will be a very different place in three years, with digitally supported advice being the norm,” he said.

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FAMR support for ‘streamlined advice’ - which will see the regulator remove its toughest liability rules from guidance without personal recommendations - will give firms greater confidence to pursue alternatives to traditional advice, he said.

Mr Goss argued this approach “is a must” if mass market clients are to be served profitably.

“FAMR’s intention to amend the definition of regulated advice so that it is clearly based on a personal recommendation in line with the EU definition ought to help firms considering providing digital guidance or advice,” he said.

Earlier this month, Mr Goss said two unnamed industry players had aborted attempts to break into robo-advice because they feared a lack of FCA guidance on liability.

“There is clearly work for HMT and FCA to do, however we see FAMR as a green light for digitally supported advice services,” Mr Goss said.

“Initial feedback from our clients has been very positive and we are pressing ahead with AccessAdvice - our automated advice service for IFA firms working with a number of clients to bring this to market.”

The final FAMR report, published earlier this month, recommended fresh consultations by the government and regulator on a proposed model of financial advice. This would allow firms to offer services that help consumers to make their own investment decisions without a personal recommendation.

Adviser view

Kevin Morgan, managing director of Hertfordshire-based Consilium Financial Planning, said: “All I know is I have been in this industry since 1983 in one form or another and the only constant has been change.

“That will continue, I am sure, with electronic solutions which will form an increasing chunk of business.”