Lenders work with FCA on automated advice unit

The Advice Unit will also now accept firms that want to provide guidance instead of regulated advice as well as firms not intending to seek authorisation.

The Unit was established in 2016 following a recommendation from the Financial Advice Market Review to provide regulatory feedback to firms developing automated advice and discretionary investment management models.

It is open to applications from firms of all sizes, whether new start-ups or large firms, provided they meet FCA eligibility criteria.

Ten firms were accepted in Summer 2016: evestor, FinEx Capital Management, HSBC, Lloyds Banking Group, Money Guidance, Mortimer Mackenzie Ltd, National Westminster Bank Plc, Nationwide Building Society, True Potential Investments, and Santander.

The second group of seven firms joined in early 2017: 1825 (part of the Standard Life group), Direct Life & Pension Services Limited, Investec Click & Invest, Moneyfarm, Multiply.ai, Personal Touch Financial Services Limited, and WealthKernel.

The FCA has also published the FAMR Baseline Report, which has identified three main themes to measure the development of the market. They are accessibility, affordability and quality of advice. The baseline findings will be used as a benchmark to assess the outcomes of FAMR when conducting the review in 2019.

It has also confirmed that the Post-Implementation Review of the Retail Distribution Review, scheduled for 2017, will now be combined with the 2019 FAMR review. The FCA says this will allow the market time to react to the regulatory change from both FAMR and MiFID II and also allow the it to make best use of its resources and minimise the reporting burden on firms.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said: “The Advice Unit’s initial work, including the support it has provided to firms, has shown its potential and the changes announced today present a further opportunity to widen consumer access to financial advice and guidance across a broader range of sectors.