On November 3, the UK Financial Conduct Authority (FCA) published a speech by Bob Ferguson, FCA Head of Department, Strategy Competition Division, giving the FCA’s perspective on robo advice.
Key points of the speech include:
- the FCA sees automated advice as a valuable vehicle to help tackle the issues faced by those consumers who are unserved or underserved by more traditional advice models, as well as promoting competition in the UK financial advice market;
- the FCA’s Advice Unit continues to be active in providing regulatory feedback and external tools to firms developing an automated advice (or guidance) model;
- the FCA believes automated advice brings its own risks, but well-designed models have great potential for compliance risk reduction; and
- the FCA will supervise robo advice firms with a focus on outcomes, looking at the suitability of recommendations for the consumer and acting where it sees harm.
The speech can be found here.