“We don’t imagine a flurry of guidance-only firms setting up. We expect current firms to want to do it but which were previously nervous to do so,” Ms McDermott said.
But she was resolute that where actual advice is given it must meet the high standards demanded by the Retail Distribution Review regulations, even if automated.
“Our view is these recommendations will be a significant incentive to firms to develop such models. But we are not interested in automated advice that gives consumers poor advice and allows firms to get away with it,” she said.
Alastair Rush, an IFA at Your Wealthcare and founder of FiverADay, a robo-advice service launched last year, said: “FAMR is a massive step forward for a new means of delivering simple, clear and safe financial advice. I welcome it immensely.
“The report is a huge validation, maybe not yet of the value of robo-advice, but certainly of the need for the facilitation of more advice, which robo advice can provide.”