Automated Advice  

How tech can help close the advice gap

This article is part of
Guide to making Project Innovate work for you

This is a significant potential time and cost-saving; according to consultancy Accenture, AML compliance costs - which are set to rise further after the European Union's fourth AML directive comes into force this year - have already increased by 50 per cent in the past three years. 

Michelle Pearce, co-founder and chief executive of Wealthify, says: "One of our key differentiators is speed. However, as a regulated online-only service, complying with AML regulations is a priority.

"This new technology helps us succeed on both fronts by speeding up the compulsory background checks, while helping us meet our compliance obligations."


The need to automate advice is not just confined to the investment or pensions space, however. Like the FCA's Project Innovate, which aims to cover fintech developments across banking, insurance, pensions and investments, automated advice models are encroaching on the protection and mortgage industry.

John Cowan, executive chairman of the Sesame Bankhall Group, says he is "urging" firms to "think deeply about their business models, due to the emerging threat created by the new financial technology and robo-advice players."

He comments: "It is still early days for these developing direct-to-consumer propositions and most of them will fall by the wayside, but there is no doubt that these new entrants are going to try and automate much of what mortgage advisers do today.

"These new firms see an industry which is ripe for challenge and where the customer experience can be improved.

"That is why we need to defend professional advice and help firms by using any new emerging technology and have it embedded in their businesses, so the experience the customer receives when they come and meet with their adviser is as streamlined and professional as possible. Quite simply we cannot allow our profession to be left behind."

He believes to do this, advisers, networks, support services providers and lenders need to work together to develop a state-of-the-art, efficient advice service, which enables the "professional mortgage adviser to get on with the job at which they excel."

Other measures

But while robo-advice or hybrid advice or bionic advice - all variations on the same theme - is one of the ways highlighted by the Financial Advice Market Review as a means of closing the gap between the number of people needing advice and the number of advisers available (and willing) to serve them, it is not the only way.

It is just one of the things being considered as part of the wave of fintech innovation among advice firms and providers alike.

As the FCA's Mr Geale explains, technological innovation will create new ways for consumers to engage with the financial services industry, and the industry will find new ways to provide compliant products and services.