Ed Smith who headed up the Financial Advice Market Review Secretariat at the Financial Conduct Authority, has laid out his predictions of what a good outcome for the regulator’s Advice Unit will look like.
At the beginning of June, the FCA launched its Advice Unit which is aimed at firms seeking to offer cheaper, technology-led alternatives to face-to-face advice.
The Advice Unit was announced in the Financial Advice Market Review report and will focus on helping firms develop fully or partly automated online services and other models that use technology to deliver lower cost advice.
Speaking at a conference held in London today (9 June) on the future of life and pensions, Mr Smith responded to a question from chair Steve Jenkins, director of financial markets at the Chartered Insurance Institute on what good would look like in terms of the success of the Advice Unit in two or three years time.
He said: “We see it helping all sorts of automated models and companies not just firms that are in the market but firms that are thinking about entering the market.
“The key criteria is that it’s an automated model of some form, it does not have to be a full robo-advice model it could be a piece of technology that helps reduce the cost of face to face advice.
“It could be a way of doing an automated fact find, these sorts of things but the key thing is that it lowers the cost of that advice and makes mass market advice more likely, more available.”
Mr Smith added the FCA has been talking to a number of different firms ranging from banks to small start ups about the project.
He added: “What would good look like? What good would look like is that we’ve helped to bring a number of models to market that are genuinely innovative that actually do help to reduce the cost of that advice, giving people advice on a cost effective basis and also in an engaging way.
“It’s not just about cost it’s also about engagement - so that’s what good looks like. I’m not pretending its easy but I think we’ve got a good stab at that.”
Mr Smith added there are a lot of interesting good models present already in the market, and this was a question of building on those and giving firms the confidence to develop their own models and navigate the regulatory space.