FCA 'will not allow' automated advice to become a mis-selling scandal

In his speech at Bloomberg this morning, FCA chief exec Martin Wheatley confirmed that the FCA will be launching a consultation paper on guidance as well as an outline of its 'broad expectations' on guidance and simplified advice.

Wheatley said the regulator is concentrating on three main areas: when guidance meets advice, disclosure and innovation.

He said:

"The most immediate and pressing concern is over how firms offer support to customers without coming up against the rules."

"One of the issues we have for middle consumers is that once the cost of advice is made explicit and clear and once you explain [the advice process and costs behind it] consumers say 'well I'm not sure I want to pay that, I'm not sure that its worth that for me' and that's one of the challenges we have had.

"Once that cost is explicit, that face-to-face model is an expensive model. There has not been a lot of innovation in what the alternatives could be for that."

"We do want to move this on but it shouldn't be mistaken for any kind of charter that we're going to slip back into a world where mis-selling or an abdication of responsibility becomes the norm."