FCA pushes robo-advice to lower cost of accessing advice

FCA pushes robo-advice to lower cost of accessing advice

Greater use of robo-advice will address the Financial Conduct Authority’s concerns about advice charges, Christoper Woolard has said.

The regulator’s director of strategy and competition was speaking after the FCA expressed concerns that some consumers were not getting value for money when they paid for advice.

Mr Woolard said there was no “magic number” at which the cost of advice was good value but encouraged advisers to be clear and transparent in how much cash they demanded for their services.

He said the FCA is also encouraging greater use of robo-advice to make sure people can access advice at different costs.

Mr Woolard said: “What we are trying to see is the development of the market at which there are a number of different price points at which people can get different services which suit their needs.

“What we have to look at there is in terms of what’s the value the consumer is receiving. 

“It can often be quite a large amount that is being paid for the vehicle to get ownership of the asset and advice on the asset as well as the overall cost of the asset itself.”

The FCA has said that in retail investments relatively few advisers are transparent about their pricing before they sell advice, adding: “This does not incentivise advisers to compete on price and may result in limited pressure on them to reduce their charges.”

It has also raised concerns about the conflicts of interest in vertical integration and “opaque remuneration structures”.

But Mr Woolard said the FCA saw no reason at this point for taking action on these issues.