Honeymoon over for robo advice
By Tom Carnegie, 24 May 18
The UK’s Financial Conduct Authority (FCA) has made it clear it will hold robo advice firms to the same high standards as human advisers, with experts saying the honeymoon is now over for those trying to curb the rules.
Ian McKenna, F&TRC managing director and founder of Digital Wealth Insights, said the FCA review highlights that there is no soft option for robo firms.
“Since 2011 the FCA has produced reams of documents making it clear what they expect in terms of suitability checks.
“This information has always been available to robo-advice firms, but it appears at least some of them have been failing to take it into account,” McKenna said.
He said it is widely recognised internationally that the UK has the toughest advice suitability standards in the world.
“If you can meet UK standards you can expect your proposition to be reusable anywhere,” he said.
McKenna further said robo firms cannot expect to have lower standards just by labelling themselves as “non-advised”.
“Some automated advice propositions seem to be labelling themselves as ‘non-advice’ because they don’t want to meet the higher regulatory burden. The regulator is now making it clear that if it looks like advice and it smells like advice they are going to call it advice.
“It looks like the honeymoon is over for the road post and they are due a dose of regulatory reality,” he said.
Tags: FCA | Old Mutual | Robo-advice
