FCA reveals hopes for robo-advice unit

FCA reveals hopes for robo-advice unit

Mr Ed Smith who headed up the Financial Advice Market Review (FAMR) 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 the 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 FAMR 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.

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Speaking at the Future of Life and Pensions conference in London, Mr Smith responded to a question from chairman Steve Jenkins, director of financial markets at the Chartered Insurance Institute, on what ‘good’ would look like in terms of the output of the Advice Unit in two or three years’ time.

Mr Smith 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 is 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, but the key thing is that it lowers the cost of that advice and makes mass market advice more available.”

He added that the FCA has been talking to a number of different firms, ranging from banks to small start-ups about the project.

He said: “It is not only about cost, but also about engagement – so that is what ‘good’ looks like. I am not pretending it’s easy, but I think we have got a good stab at that.”