Banks reveal robo-advice plans

Banks reveal robo-advice plans

A number of large banks are weighing up their options about whether to enter the robo-advice market.

Last week the Financial Conduct Authority revealed half of the companies working with its dedicated advice unit - set up to help foster different types of financial advice offerings, including robo-advice - are banks.

Yet only one of the banks contacted by FTAdviser confirmed they were working with the regulator to bring automated advice to the market, but several have said they are looking into offering robo-advice without the help of the City watchdog.

Last year Santander began offering branch-based investment advice and the bank said it now has 225 advisers across its branch network.

A spokeswoman told FTAdviser that it was planning a digital advice solution but only commented to say it would provide an update on these “in due course”.

Meanwhile a Lloyds Banking Group spokesman said: “We are continuing to review the market following the Financial Advice Market Review Report, and subsequent consultations.

“At present we have no imminent plans to launch a robo-advice service.

“Our products and services are continually under review as the market evolves.”

The advice unit was set up in the wake of the Financial Advice Market Review, which was published last year.

The Financial Advice Market Review was tasked with tackling the advice gap and improving access to advice for the masses after the Retail Distribution Review saw a growing number of intermediaries focus on high net-worth clients.

The advice unit will focus on helping firms develop fully or partly automated online services and other models that use technology to deliver low cost advice.

In September the FCA said there had been 19 applications to work with its advice unit, with nine firms accepted in the initial tranche but none of these have been identified by the regulator.

Last week, the FCA confirmed to FTAdviser that five of the companies it was working with are banks.

Only True Potential has come forward voluntarily to say it is working with the FCA's advice unit, saying it wants to provide quality advice at a lower cost.

Last year Royal Bank of Scotland and NatWest, which are part of the same group, said they would no longer be offering face-to-face investment advice for customers with assets, excluding their home, of less than £250,000.

Instead it would be “significantly investing” in an online platform to allow people to invest with as little as £500.

A spokesman for RBS said it had no update on the development of its advice proposition but did confirm it was not one of the five banks working with the FCA.

When asked was Barclays working with the FCA on automated advice, a spokesman for the bank was only willing to say: “We’re not planning anything specifically around robo-advice, however we constantly trial new products and services and explore ways to use technology to make our customers’ lives easier.”