FCA chief executive Martin Wheatley says financial products can be sold online on an advised basis with no human intervention.
Speaking to the Treasury select committee this week, Wheatley said the FCA will consult on the dividing line between advice and execution-only in the next three months.
TSC chair Andrew Tyrie asked Wheatley if it is possible to sell a product online and offer advice without human intervention, to which Wheatley replied: “Yes”.
But Wheatley said it should be “much clearer” when advice is been given online because there is currently “misunderstanding” from consumers.
He said: “It is a real concern because the distinction between advised and execution-only products on the web is not a distinction people easily determine. We are spending a lot of time talking to the industry about whether we need to revise our guidance to make sure products fall into one class or the other.”
In December the FCA launched a thematic review into non-advised sales and simplified advice and is currently carrying out visits to 14 sampled firms.
Speaking alongside Wheatley, FCA chairman John Griffith-Jones said he was working with firms on an automated simplified advice model.
He said the FCA should encourage innovation and “not let the perfect be the enemy of the good”.
Plan Money director Peter Chadborn says: “The word ’advice’ is misleading if there is no human interaction, just like the Money Advice Service. I do not see how advice can be given without intervention unless there is a rigid set of questions.”